PayPal Is Down 24% Year to Date. Here’s Why the Turnaround Story Still Has Upside in 2026

Key Stats for PYPL Stock

• Year-to-Date Performance: -24%
• 52-Week Range: $38 to $80
• Valuation Model Target Price: $67
• Implied Upside: 53%

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What Happened?

PayPal Holdings stock is down about 24% year to date, trading near $45 per share, as investors remain focused on whether the company can successfully execute a turnaround after growth slowed in its core checkout business and expectations were reset earlier this year.

The stock is down primarily because PayPal’s branded checkout, its highest-margin product where users pay directly through PayPal at online checkout, grew just 1% in the fourth quarter, signaling weak volume growth as the company faces increasing competition from Apple Pay, Block, Adyen, and Stripe, which offer faster checkout experiences or deeper merchant integrations.

At the Wolfe FinTech Forum, PayPal highlighted that 2025 delivered mid-teens EPS growth, 6% transaction margin dollar growth, Venmo monetization growth of 20%, and buy now, pay later volume of more than $40 billion, while management said branded checkout trends have been only slightly better than the 1% growth reported in the fourth quarter.

CFO Jamie Miller said Enrique, who started last Monday, is bringing “faster decision-making” as the company pushes a more targeted execution plan for 2026, while also planning about $400 million in investments this year, even as transaction margin dollar growth is expected to be slightly negative, or roughly flat excluding interest on customer balances.

Institutional positioning reflects a split view on the stock. SG Americas Securities increased its stake by 245.6% in the fourth quarter to about 1.09 million shares, while Wealth Enhancement Advisory Services raised its holdings by 21.1% to about 210,000 shares, but Nordea Investment Management reduced its stake by 24.2% to about 3.25 million shares and Assenagon Asset Management trimmed its position by 15% to about 1.55 million shares, suggesting investors remain divided on whether PayPal’s investments can translate into stronger growth.

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Is PYPL Undervalued?

Under valuation assumptions, the stock is modeled using:

• Revenue Growth (CAGR): 4.3%
• Operating Margins: 16.7%
• Exit P/E Multiple: 8.2x

PayPal’s outlook reflects a transition toward slower but more stable growth, as total payment volume continues to expand but pricing pressure from competitors reduces how much the company earns per transaction.

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Margin expansion is expected to drive earnings growth, supported by cost discipline and a mix shift toward higher-margin products such as branded checkout and merchant services, which help businesses process payments and improve conversion rates.

Venmo remains a key driver, as monetization through debit cards, Pay with Venmo, and merchant integrations can increase revenue per user, while buy now, pay later supports higher transaction sizes and engagement.

At the same time, competition from Apple Pay, Block, Adyen, and Stripe continues to pressure PayPal’s ability to grow pricing, making execution across checkout experience, merchant partnerships, and product differentiation critical to sustaining growth.

Based on these assumptions, the model estimates a target price of about $67, implying roughly 53% upside, suggesting the stock appears undervalued if PayPal can stabilize its core checkout growth while continuing to expand margins.

At current levels, PayPal appears undervalued, with future performance driven by margin expansion, Venmo monetization, and improved execution across its core checkout and merchant ecosystem in 2026.

How Much Upside Does PYPL Stock Have From Here?

Investors can estimate PayPal Holdings’ potential share price, or what any stock could be worth, in under a minute using TIKR’s New Valuation Model tool.

All it takes is three simple inputs:

1. Revenue Growth
2. Operating Margins
3. Exit P/E Multiple

From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.

If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.

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