Samantha LaDuc
Founder & Strategist of LaDucTrading, Cross-Asset Analysis
PayPal's raised earnings and free-cash-flow guidance supports rejecting Stripe and Advent's $60.50-per-share offer. The shares now trade around $57, below the rejected bid, but that does not make the rejection a mistake. x.comÂ
PayPal should hold a floor now that Stripe's dropped $60.50 offer put a value on it, making a return to the $30s unlikely. The very lows should be the low to mid $40s; with nearly 500 million global daily active users, it looks too cheap for an acquirer to pass up, and it could make Elon Musk's X a force. Without more takeover talks, though, it could bleed lower to fill the gap toward its $47 pre-bid price. x.com x.comÂ
PayPal is better off sold, because management has been unable to use the company's data while Stripe and Advent can. Even at Stripe's $60.50 acquisition price, most PayPal investors will still be in the red; only those all in at the bottom would make about 50%, while most AI names have risen much more. Selling losers is the better path. x.com x.com x.comÂ
PayPal is worth much more than Stripe's reported $53 billion takeover offer, and its board reportedly rejected the bid as inadequate. PayPal makes over $5 billion a year and is growing, buys back about 7% of its shares annually, and traded at just 9x earnings before the news and 11x the offer. $75 a share should be the bare minimum, and a bidding war may follow. x.comÂ
PayPal's beat-and-raise quarter supports the bull case. Per @DeItaone, Q2 EPS was $1.38 versus $1.28 expected, revenue $8.68B versus $8.47B and payment volume $486.5B versus $468.5B, and full-year adjusted EPS guidance rose to about $5.38. PayPal plans $6B of buybacks this year and at least $1.5B of cost savings over 2-3 years, though it expects a low-single-digit decline in Q3 adjusted EPS. x.comÂ
PayPal's near-flat growth and rising checkout competition leave it a Grade C, prove-it story. Q3 FY26 revenue rose just 2%; operating income fell 8% as restructuring charges rose from $69 million to $255 million, and net income fell 14%. The business still earns over $1 billion a quarter, but it is treading water. x.comÂ
PayPal likely has a floor now, given its new Anthropic partnership and the potential split of Venmo. Per @StockSavvyShay, PayPal and Anthropic are launching AI training for small businesses, including a free course and a Claude for Small Business plugin that connects Claude to PayPal, QuickBooks, HubSpot and Canva for tasks like invoicing and refunds. x.comÂ
PayPal options activity suggests traders are positioning for a longer-term move up, unless it is a hedge, so the stock should recover soon. The war has weighed on the shares. x.comÂ
PayPal's cost cuts and reserve releases prop up short-term numbers, while investing for growth wastes time. Its slow bleed gives delusional bulls hope, making it the ultimate value trap; it should not be a public company. x.comÂ
PayPal's downside finally looks done after a 10-year round trip, leaving the stock undervalued at a P/E of 8 and a PEG ratio of 0.8. A solid Q2 report could start a recovery back to $60+. x.comÂ