PayPal stock has been well and truly hammered recently. Over the last year, it has fallen around 50%1 as investors have grown increasingly concerned about intensifying competition from Apple, Google, and other players in the FinTech space.
Is the stock capable of a rebound? Let’s take a look at the setup.
Q4 Earnings Were Poor
PayPal’s recent earnings, for the fourth quarter of 20252, were disappointing. For the quarter, revenue came in at $8.7 billion, up just 3% year on year at constant currency and below the consensus forecast3 of $8.8 billion.
Non-GAAP earnings per share (EPS) was $1.23, also up only 3%. Analysts had been expecting $1.28.
Looking ahead, the company said that for Q1 2026, it expects a mid-single digit decline for non-GAAP EPS. As for 2026, it expects non-GAAP EPS to experience a low-single digit decline or be slightly positive year on year.
Going into the print, Wall Street had been expecting 8% growth in EPS for 2026. So, this earnings guidance was well below expectations.
A New CEO is Coming In
However, while Q4 earnings and guidance for 2026 were poor, there are some reasons to be optimistic in relation to PayPal stock. One is that the company has just replaced4 its CEO Alex Chriss. He has been replaced by Enrique Lores, who was previously CEO of HP, and will start on March 1, 2026. PayPal’s board believes that Lores – who successfully led HP through a period of strategic transition and innovation – can provide the leadership necessary to lead PayPal into its next chapter.
Lores is hoping to strengthen the culture of innovation at PayPal in an effort to deliver long-term transformation while balancing this with near-term delivery. "The payments industry is changing faster than ever, driven by new technologies, evolving regulations, an increasingly competitive landscape, and the rapid acceleration of AI that is reshaping commerce daily. PayPal sits at the center of this change, and I look forward to leading the team to accelerate the delivery of new innovations and to shape the future of digital payments and commerce," he said after his appointment as CEO.
Room for Improvement
One thing that Lores will definitely be aiming to fix is PayPal’s branded checkout, which has really struggled recently. In the fourth quarter5, for example, online branded checkout total payment volume (TPV) only grew 1% on a currency-neutral basis (versus 5% growth in the third quarter).
Looking ahead, the company is going to be focused on improving the experience for users, ensuring a frictionless consumer experience through biometric and passkey adoption. It also wants to present its offering more effectively on merchants' websites and deliver loyalty benefits using rewards and co-marketing agreements with compelling consumer incentives.
The good news for Lores is that there are some areas of the business that are performing well at present. Venmo is one – in 2025 its revenue grew 20% to $1.7 billion with total active accounts surpassing 100 million. Buy Now, Pay Later (BNPL) was another area of the business that showed momentum in 2025. Here, TPV amounted to $40 billion, up more than 20% year on year.
Large Stock Buybacks
Another reason to be optimistic is that the company is buying back a lot of stock. During Q4, PayPal returned $1.5 billion to stockholders by repurchasing approximately 23 million shares. Meanwhile, over the course of 2025, it returned $6.0 billion to stockholders by repurchasing approximately 86 million shares. These buybacks will have reduced the share count significantly, supporting earnings per share going forward.
Low Valuation
As for the stock’s valuation, it is very low at present. Assuming no earnings growth in 2026, earnings per share is likely to be around $5.30. That puts the stock on a forward-looking price-to-earnings (P/E) ratio of just 7.5 at present. At that earnings multiple, there is scope for a material upward valuation re-rating if new CEO Enrique Lores can engineer a return to growth.
It’s worth noting that while Wall Street analysts have been lowering their price targets6 for PayPal recently, a number of firms have targets that are well above the current share price including:
RBC Capital – $59
Susquehanna – $63
Mizuho – $60
These price targets signal that analysts see scope for a share price recovery from here.
Can PayPal Stock Rebound?
As for the stock’s valuation, it is very low at present. Assuming no earnings growth in 2026, earnings per share is likely to be around $5.30. That puts the stock on a forward-looking price-to-earnings (P/E) ratio of just 7.5 at present. At that earnings multiple, there is scope for a material upward valuation re-rating if new CEO Enrique Lores can engineer a return to growth.
Footnotes:
1Google Finance, as of November 6, 2026
2PayPal Reports Fourth Quarter and Full Year 2025 Results, as of February 3, 2026
3CNBC, PayPal shares plunge nearly 20% on CEO exit, disappointing 2026 profit forecast, as of February 3, 2026
4PayPal Newsroom, PayPal Appoints Enrique Lores as Chief Executive Officer and David W. Dorman as Independent Board Chair, as of February 3, 2026
5The Motley Fool, PayPal (PYPL) Q4 2025 Earnings Call Transcript, as of February 3, 2026
6Investing.com, PayPal Holdings Inc (PYPL), as of February 6, 2026
