PayPal Holdings, Inc. (NASDAQ:PYPL) continues to show low forward PE ratios, indicating it could be undervalued in the current market. On January 26, investment firm BTIG reaffirmed a Neutral rating on PayPal, noting the stock’s significant decline of 19% since the release of its third-quarter earnings report on October 28, 2025.
Looking ahead, PayPal’s management has indicated expectations of reduced growth in fiscal year 2026, coupled with an increase in operational expenses that aligns with the anticipated growth in trade margin dollars. Wall Street analysts predict a mere 4% growth in trade margin dollars for FY26, down from 6% in FY25, along with an adjusted earnings per share (EPS) growth forecast of 8%, a notable drop from 15% in the previous year.
Despite these challenges, BTIG remains optimistic about PayPal’s strategic investments in growth areas such as buy-now-pay-later services, agentic commerce—which includes the acquisition of Cymbio—and enhancements in current product engagement. However, they caution that any substantial return on these investments may not be evident until at least FY27.
Based in San Jose, California, PayPal operates a global technology platform that facilitates digital payments for both merchants and customers. It offers a range of payment services through multiple brands, including PayPal, Credit, Braintree, Venmo, Xoom, and Zettle.
While the potential of PayPal as an investment opportunity is recognized, some analysts believe that certain AI stocks may present a more compelling upside with reduced risks. Investors exploring lucrative options may consider this landscape, especially with the ongoing trends influenced by tariffs and onshoring initiatives.
PayPal remains a significant player in the payment technology sector, and its ongoing strategies could pave the way for a turnaround in future performance.