PayPal stock has dropped 13.7% YTD due to competition and macroeconomic pressures
From Nasdaq
June 30, 2025 11:42:00 AM:
PayPal (PYPL) shares have dropped 13.7% year to date due to increased competition in the fintech sector. Rivals like Visa, Mastercard, Apple Pay, and Adyen are challenging PayPal’s dominance in digital payments. Broader macroeconomic pressures and tariff policy uncertainty have also impacted investor sentiment.
PayPal is evolving into a strategic commerce partner, focusing on personalized experiences and a dynamic smart wallet. Transaction margin dollars rose 7% in the first quarter of 2025, driven by strong performance in omnichannel commerce and Venmo. PayPal’s Buy Now Pay Later business is gaining traction, with strong growth in volume and monthly active accounts.
Despite challenges, PayPal’s strategic partnerships with companies like Coinbase and Amazon are boosting its growth outlook. However, investments in product modernization and expansion may impact margins in the near term. The company remains cautious due to macroeconomic uncertainties like geopolitical tensions and tariff-related risks.
PayPal shares are trading cheap compared to competitors like Visa and Mastercard, with a forward P/E ratio of 13.74X. Estimate revisions for the second quarter and full years 2025 and 2026 show positive trends. PayPal’s strategic transformation, despite challenges, shows early success. Investors may consider holding off on decisions until there is more clarity on macroeconomic conditions and policy changes affecting PayPal.
Read more at Nasdaq: What Does 13% YTD Drop Mean for PayPal Stock? Buy, Hold or Sell?