Cole
Momentum Stock & Options Trading, Public Trading Journal
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'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 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's growth has stalled and it faces too much fintech competition. That view could change if the company adapts, pivots and proves otherwise. x.comÂ
PayPal faces an existential competitive threat from X Money, which will kill its business. 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 a value trap with a great story until a real catalyst appears. At about 8x forward earnings it is near a decade low and cheaper than JPMorgan, but cheapness has been the thesis for two years while it kept getting cheaper. A re-rating needs a trigger: a buyer, a turn in Venmo monetization, or price carving a higher low to prove the bleed is over. x.comÂ
PayPal's problem is deeply rooted poor management and a complete lack of ambition; it could have made a dozen moves over the years to expand and grow. Stripe appears to be the only buyer willing to take it on. x.com 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 is worth over $100 a share, but its current board will not get it there. x.comÂ