Key Takeaways
- PayPal became the only native in-app checkout partner on Glance, an AI shopping app reaching tens of millions of U.S. consumers.
- Q2 revenue rose 5% to $8.68 billion, but transaction margin dollars grew just 1% to $3.9 billion.
- The collapsed $53 billion Stripe and Advent bid leaves the stock at 10.3x forward earnings with no buyout floor.
- October 27 Q3 results will test whether the raised $5.38 adjusted EPS guidance holds.
PayPal Holdings (PYPL) wants its checkout button inside every AI shopping app.
Its newest partner is Glance, an AI shopping platform backed by InMobi that reaches tens of millions of U.S. consumers. PayPal is the only company offering native in-app checkout there.
Shares closed at $57 on October 20, up 1.1%. That is above the $54 close on August 28, when reports that a Stripe and Advent International group had walked away sent the stock down 12.7%.
AI shopping gets a PayPal button
Glance lets shoppers try on clothes with an AI avatar, build a cart, and pay without leaving the app. PayPal’s agentic commerce tools, software that lets AI agents shop for people, connect merchants to that flow.
Mike Edmonds, PayPal’s vice president of agentic commerce, said in the launch release that the goal is to “help prepare merchants for a future where commerce can happen anywhere.”
No financial terms came with the deal. PayPal already handles checkout inside ChatGPT, so Glance widens a list rather than starting one.
The real question is whether the core business is growing…
Q2 revenue rose 5% to $8.68 billion, beating the $8.47 billion consensus. Adjusted EPS of $1.38 topped the $1.28 estimate.
The buyout floor is gone
In July, Stripe and Advent reportedly offered $60.50 per share, or about $53 billion, with Block (XYZ) reported as an equity partner. The board viewed the offer as inadequate, and the group walked away.
Now the stock trades on its own merits. Transaction margin dollars, PayPal’s profit after processing costs, grew just 1% in Q2 to $3.9 billion.
Margins show the same squeeze…
GAAP operating margin fell 1.7 percentage points to 16.4% in Q2. So cost cuts still aren’t fully offsetting pricing pressure from merchants and rivals.
TIKR tracks 44 analysts on PayPal. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on PayPal, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See PayPal’s Analyst Ratings
Cheap, but not without reason
Management still raised full-year guidance to about $15.6 billion in transaction margin dollars and $5.38 in adjusted EPS. Yet analysts expect EBITDA to shrink about 3.3% a year over the next two years.
That gap shows up in the valuation…
Shares trade at 10.3x forward earnings, and the average analyst target of $57 sits right at today’s price.
My take: The Glance deal is smart positioning, but Glance is one AI storefront among many. I think the low multiple is fair until branded checkout growth clearly improves.
The next checkpoint is October 27. Q3 results will show whether transaction margin dollars can finally grow faster than revenue.
So what is PayPal stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
