Key Stats for PayPal Stock
- Price change for PayPal stock in last 6 months: 13%
- $PYPL Stock Price as of Oct. 27: $56
- 52-Week High: $73
- $PYPL Stock Price Target: $57
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What Happened?
PayPal (PYPL) shares slipped 3% in premarket trading after its Q3 report. The stock later recovered during the day and ended 2% higher as the company beat consensus on profit but missed on sales.
- Adjusted earnings were $1.45 per share, up 8% from last year. Analysts expected $1.31, so that is a 10.7% beat.
- Revenue was $8.58 billion, while analysts were looking for $8.71 billion, which is a miss of about 1.5%.
Cost control helped profit as non-transaction operating expenses grew just 1%. Transaction margin dollars rose about 2%, and non-GAAP operating income grew 3%.
Growth is coming from outside the core checkout business, and branded checkout volume growth stayed in the 1% to 2% range.
Venmo volume grew at a double-digit pace for the eighth straight quarter, and Braintree volume rose 10%.
Europe was a drag as the removal of the EU de minimis tax exemption created about 70 basis points of headwind for branded checkout. Management expects that to last through Q4.
PayPal also raised its full-year outlook. It now expects 2026 EPS of about $5.60 and adjusted free cash flow of at least $6.5 billion.
For Q4, it expects EPS of about $1.43 and low single-digit revenue growth on a currency-neutral basis.
Cash flow was strong. PayPal generated $2 billion in adjusted free cash flow in the quarter, and also bought back $1.5 billion of stock, bringing the total to $6 billion over the past 12 months.
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What the Market Is Telling Us About PayPal Stock
The reaction was small, but it shows investors wanted more. The earnings beat shows PayPal is managing costs well, and the revenue miss shows the core business is still growing slowly.
Guidance did not add much excitement either. Management said 2027 will be an investment year, with more spending on products and marketing. It still expects EPS growth next year to be similar to this year.
The valuation gives some context. PayPal has a market cap of about $47 billion and a free cash flow yield of 14%.
The shares are also well below their 52-week high, so PayPal stock has a lot of ground to make up if the turnaround works.
For now, the story is a mix. Profit and cash flow look healthy, while top-line growth is uneven.
Investors will likely watch whether Venmo and financial services can keep growing faster than branded checkout.
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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!
