PayPal has gotten torched over the last six months - since August 2025, its stock price has dropped 38.8% to $41.65 per share. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation.
Given the weaker price action, is this a buying opportunity for PYPL? Find out in our full research report, it’s free.
Why Does PayPal Spark Debate?
Originally spun off from eBay in 2015 after being acquired by the auction giant in 2002, PayPal (NASDAQ: PYPL) operates a global digital payments platform that enables consumers and merchants to send, receive, and process payments online and in person.
One Positive Attribute:
1. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.
Over the last five years, PayPal has averaged an ROE of 19.9%, excellent for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows PayPal has a strong competitive moat.
One Reason to be Careful:
Lackluster Revenue Growth
We at StockStory place the most emphasis on long-term growth, but within financials, a stretched historical view may miss recent interest rate changes, market returns, and industry trends. PayPal’s recent performance shows its demand has slowed as its annualized revenue growth of 5.6% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
Final Judgment
PayPal has huge potential even though it has some open questions. With the recent decline, the stock trades at 7.8× forward P/E (or $41.65 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.
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