Should You Buy PayPal Stock at About 10 Times Its Expected 2026 Earnings?
The value only matters if the risk is low. The market's struggling to determine where this ticker currently is on that scale.
PayPal's shares are trading at a discount, currently at just 10.3 times expected 2026 earnings of $5.55 per share. This low valuation, coupled with the company's recent struggles, has many investors questioning whether it's worth the risk to buy now. PayPal's growth has slowed as the digital payment market becomes increasingly crowded, with revenue growth of only 2% year-over-year.
Profit margins are also shrinking, with the company facing pressure from competitors like Apple, Google, and Stripe. However, there are reasons to be optimistic. The new CEO, Enrique Lores, has a plan to integrate PayPal's payment technology with artificial intelligence and expand into new financial services like buy-now-pay-later.
Profit guidance for the current quarter shows improvement, with an expected $1.43 per share, up from $1.23 last year. This suggests a full-year earnings outlook of $5.60 per share. Another potential upside is the possibility of an acquisition, as evidenced by renewed interest from Greenlight Capital. While the competition and risks are significant, the current valuation and potential turnaround efforts make PayPal an intriguing speculative investment for those willing to take the risk.
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