Has PayPal Stock Become A Different Bet?

PayPal (PYPL) stock is priced at 9.8 times earnings. That compares with a multiple of 21.5 for the broader S&P 500. Investors looking at that price need a clear picture of the underlying business. The company, meanwhile, has shifted its priorities. During earlier earnings calls, executives highlighted branded checkout, the PayPal option shoppers select when paying online. Checkout is no longer the headline. So what does PayPal’s management lead with now?

PayPal’s Focus Has Moved To Credit And Venmo

The leadership team now focuses the conversation on financial services. This category includes credit and Buy Now Pay Later offerings across both PayPal and Venmo. During the fiscal Q2 2026 call in July, executives noted that PayPal is diversifying beyond checkout using these financial services. They identified this segment as the largest driver of future growth in transaction margin, the profit PayPal makes on payments before its overheads.

Previous discussions prioritized checkout, a product the company had set out to repair. During the fiscal Q3 2024 call, the then-CEO said PayPal had needed significant work to improve branded checkout and presented new mobile checkout experiences as the fix. By the fiscal Q2 2025 call, he highlighted 8% growth in payment volume across branded products. That narrative shifted again during the fiscal Q4 2025 call, when management admitted it had been too optimistic about how quickly it could change online branded checkout.

Is PayPal’s Checkout Keeping Pace With Venmo And Lending?

No. Before currency effects, online branded checkout volume rose 2% in fiscal Q2 2026, matching the pace of the prior quarter. In contrast, payment volume through Pay with Venmo and Buy Now Pay Later grew much faster, at 44% and 26%. Management added that financial services revenue is on pace to grow at least twice as fast as the whole company in 2026.

That growth does not yet show in other value-added services revenue, the line that includes PayPal’s consumer and merchant credit. That line remained about flat at $850 million in fiscal Q2 2026. This figure represents roughly a tenth of the latest quarterly revenue of $8.7 billion for PayPal. Management noted that credit contributed strongly, but lower interest rates on customer balances offset that performance.

Transaction Margin Growth Has Slowed At PayPal

Transaction margin dollars grew 3% in fiscal Q2 2026, down from 8% in fiscal Q2 2025, both excluding interest on customer balances. This slowdown has occurred while management changes direction, and for now it remains a reason for caution.

Executives do not expect a quick turnaround, either. They indicated that momentum in PayPal’s next phase of growth should build in the second half of 2027. In the meantime, PayPal is returning cash to shareholders. The company plans to buy back about $6 billion of its shares in 2026, which represents about an eighth of its $48.2 billion market value.

PayPal is still working on checkout as well. During the fiscal Q2 2026 call, management raised its full-year outlook for online branded checkout volume to low single-digit growth. Online branded checkout growth above 2% on the fiscal Q3 2026 call would show PayPal repairing its checkout business while financial services grow.

Does This Mean You Should Act On PYPL?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

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