Crypto

PayPal facing challenges from competitors like Visa and Mastercard, but showing growth potential

by Market News Data

From Nasdaq
July 1, 2025 09:27:00 AM:

PayPal’s stock has dropped 13.7% YTD due to intense competition from rivals like Visa, Mastercard, Apple Pay, and Adyen. PayPal is facing challenges from macroeconomic pressures and tariff policy uncertainty, causing investor sentiment to dampen. However, it’s essential to assess PayPal’s growth potential before making any decisions.

Compared to its peers, PayPal’s performance has been weaker, with Visa and Mastercard stocks rising 10.3% and 4.5%, respectively. PayPal’s focus on enhancing branded checkout, P2P services, and Venmo has supported growth in active user accounts and transaction margin dollars. The company is also expanding globally with new features like NFC functionality.

PayPal’s Buy Now Pay Later (BNPL) business is gaining traction, leading to increased volume and active accounts. The company’s strategic partnerships with firms like Coinbase Global and Amazon are enhancing its growth outlook. Despite strong performance, PayPal is cautious due to macroeconomic uncertainties and ongoing investments in product modernization.

PayPal shares are trading cheap compared to competitors like Visa and Mastercard, with a forward 12-month P/E ratio of 13.74X. Estimate revisions for PayPal show positive trends for Q2 and full years 2025 and 2026, indicating growth potential. However, stiff competition, macroeconomic challenges, and margin trade-offs could impact PayPal’s near-term outlook.

PayPal’s strategic transformation is well underway, supported by a strong user base and key initiatives like branded checkout, Venmo, and BNPL. While the stock is trading at a discount, investors should wait for more clarity on macroeconomic conditions before making decisions. With a Zacks Rank #3 (Hold), PayPal shows promise in the evolving fintech space, but caution is advised in the current market environment.

Read more at Nasdaq: The Zacks Analyst Blog Highlights PayPal, Visa, Mastercard and Coinbase Global

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