PayPal’s Stock Sees Strong Gains Amid Mixed Earnings Outlook
PayPal Holdings, Inc. (PYPL), a Californian global technology firm, operates a digital payments platform that simplifies online transactions for consumers and merchants. With a market capitalization of $89 billion, the company supports over 400 million active user accounts globally, facilitating payments in various currencies across numerous devices.
Significant Outperformance Against Major Indices
In the past year, PayPal’s shares have notably outperformed the broader market. PYPL has surged 40.7%, while the S&P 500 Index ($SPX) has increased by nearly 23.3%. This year, PYPL stock is up 4.9%, outpacing the SPX’s growth of 3.2% year-to-date.
Comparison with Fintech Sector
Focusing on the fintech sector, PYPL has also exceeded the performance of the GX Fintech ETF (FINX), which has risen approximately 35.5% over the past year. However, in 2025, FINX has gained 7.1%, slightly ahead of PayPal’s returns.
Strong Market Position Drives Momentum
PayPal’s success stems from its robust portfolio and long-standing relationships with consumers and merchants, contributing to its continued momentum over the last year.
Mixed Reactions Following Recent Earnings Report
On December 13, PYPL’s stock rose over 1% following an upgrade from Wolfe Research, which boosted its rating from “Peer Perform” to “Outperform” and set a price target of $107. Conversely, shares dropped by 4% on October 29 after the company announced its Q3 results. Although it reported a better-than-expected adjusted EPS of $1.20, its Q4 guidance was disappointing, predicting low-single-digit revenue growth and a decrease in adjusted EPS by a low- to mid-single-digit percentage.
Positive Earnings Forecasts Amidst Concerns
For the current fiscal year ending in December 2024, analysts anticipate that PYPL’s EPS will grow by 21.2% to $4.58 on a diluted basis. Impressively, the company has beaten consensus estimates in each of the last four quarters.
Analyst Consensus on PayPal Stock
Among the 41 analysts covering PYPL, the consensus rating is a “Moderate Buy,” supported by 17 “Strong Buy” ratings, two “Moderate Buys,” 21 “Holds,” and one “Strong Sell.” This sentiment is less optimistic than two months ago when 15 analysts rated it as a “Strong Buy.”
On January 24, Arvind Ramnani from Piper Sandler Companies (PIPR) maintained a “Hold” rating on PayPal with a price target of $93. The average price target stands at $94.32, indicating a 5.3% premium over PayPal’s current price. The highest target is set at $125, suggesting an upside potential of 39.6%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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