PayPal Stock Testing Price Floor – Buy Now?
PayPal (PYPL) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($39.62 – $43.79), levels from which it has bounced meaningfully before. In the last 10 years, PayPal stock received buying interest at this level 3 times and subsequently went on to generate 184.3% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 5/16/2017 | 9.1% | 55 |
| 7/10/2017 | 461.6% | 1474 |
| 10/27/2023 | 82.2% | 448 |
Yet, a support zone alone isn’t enough; rebounds are more likely when fundamentals, sentiment, and market conditions line up. How does that look for PYPL?
Unlikely: Earnings miss, weak outlook, intense competition.
PayPal’s Q4 2025 results missed revenue and EPS estimates, alongside a weak 2026 profit outlook, triggering a 20%+ stock plunge. New CEO Enrique Lores assumes leadership amid acknowledged execution underperformance. Branded checkout growth slowed to 1%, reflecting fierce competition from Apple Pay and Google Pay, and softer consumer spending. While digital payments grow, PayPal’s specific headwinds, including declining take rates and legal investigations, overshadow industry tailwinds. Analyst targets face likely downgrades; immediate rebound seems improbable with new investments causing a short-term earnings drag.
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 the last 3 years for PYPL was 4.5%.
- Valuation: PYPL stock trades at a PE multiple of 8.1
| PYPL | S&P Median | |
|---|---|---|
| Sector | Financials | – |
| Industry | Transaction & Payment Processing Services | – |
| PE Ratio | 8.1 | 24.6 |
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| LTM* Revenue Growth | 4.5% | 6.4% |
| 3Y Average Annual Revenue Growth | 6.7% | 5.6% |
| Min Annual Revenue Growth Last 3Y | 4.5% | 0.3% |
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| LTM* Operating Margin | 19.2% | 18.8% |
| 3Y Average Operating Margin | 17.9% | 18.3% |
| LTM* Free Cash Flow Margin | 16.9% | 14.0% |
*LTM: Last Twelve Months | For more details on PYPL fundamentals, read Buy or Sell PYPL Stock.
And What If The Support Breaks?
PayPal isn’t immune to big drops either. It fell 20% in the 2018 correction and over 31% during the Covid pandemic sell-off. The inflation shock hit much harder, with a steep 84% decline from peak to trough. Even with solid fundamentals, these numbers show the stock can suffer serious losses when markets turn south. Good companies still face sharp pullbacks 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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