PayPal Stock at Support Zone – Bargain or Trap?
PayPal (PYPL) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($59.67 – $65.95), levels from which it has bounced meaningfully before. In the last 10 years, PayPal stock received buying interest at this level 6 times and subsequently went on to generate 83.2% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 7/27/2017 | 9.4% | 70 |
| 10/5/2017 | 368.7% | 1387 |
| 5/16/2023 | 24.7% | 76 |
| 1/5/2024 | 13.0% | 116 |
| 6/20/2024 | 53.5% | 211 |
| 4/16/2025 | 29.8% | 103 |
Yet, a support zone alone isn’t enough; rebounds are more likely when fundamentals, sentiment, and market conditions line up. How does that look like for PYPL?
Rebound likely on valuation, strong Q3, strategic moves.
PayPal’s Q3 2025 exceeded earnings and revenue estimates, prompting raised FY25 EPS guidance. The initiation of a dividend and aggressive share repurchases underscore financial discipline and shareholder return focus. Strategic moves in BNPL, including a $7 billion loan sale to Blue Owl, along with AI partnerships and robust Venmo growth, leverage digital payment tailwinds. Despite declining transactions per active account and persistent margin pressure, the stock’s significant valuation discount compared to industry peers, coupled with substantial free cash flow, suggests a likely rebound from its current price support zone.
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How Do PYPL Financials Look Right Now?
- Revenue Growth: 4.5% LTM and 6.7% last 3 year average.
- Cash Generation: Nearly 16.9% free cash flow margin and 19.2% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in last 3 years for PYPL was 4.1%.
- Valuation: PYPL stock trades at a PE multiple of 12.1
| PYPL | S&P Median | |
|---|---|---|
| Sector | Financials | – |
| Industry | Transaction & Payment Processing Services | – |
| PE Ratio | 12.1 | 23.4 |
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| LTM* Revenue Growth | 4.5% | 6.1% |
| 3Y Average Annual Revenue Growth | 6.7% | 5.4% |
| Min Annual Revenue Growth Last 3Y | 4.1% | 0.2% |
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| LTM* Operating Margin | 19.2% | 18.8% |
| 3Y Average Operating Margin | 17.9% | 18.2% |
| LTM* Free Cash Flow Margin | 16.9% | 13.5% |
*LTM: Last Twelve Months
For more details on PYPL fundamentals read Buy or Sell PYPL Stock. Nevertheless, equities is not the only thing we do. Is a portfolio of 10% commodities, 10% gold, and 2% crypto in addition to equities and bonds – likely to return more and protect you better? We have crunched the numbers.
What Is Stock-Specific Risk If The Market Crashes?
PayPal isn’t immune to big drops. It fell about 20% in the 2018 correction, nearly 31% during the Covid crash, and a massive 84% in the recent inflation shock. Even with plenty of tailwinds, the stock still shows sharp pullbacks when volatility hits. So, solid fundamentals don’t mean it’s safe from steep sell-offs in tough times.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read PYPL Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
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