PayPal’s stock price has remained under pressure this year and has moved to its lowest level since April last year. It dropped to a low of $57.25, down by 38% from its highest level in 2025, with its market capitalization falling from over $100 billion to the current $54 billion.
PayPal’s business is facing major headwinds
PayPal stock continued falling this year as concerns about its growth trajectory this year. The most recent results showed that its revenue rose by 7% in the third quarter to $8.4 billion. This growth is substantially slower than in the past, when the company used to experience double-digit growth rates.
PayPal is facing more challenges, including the rising competition, especially from stablecoins like USDC and USDT. Historically, PayPal transactions costs over 2% of the amount being sent or received. As such, a $2,000 transaction will typically cost over $70.
In contrast, stablecoin transactions normally cost a few pennies. A user will mostly receive the same amount, especially when using layer-2 blockchains like Base and Polygon.
Therefore, many users are opting to use these stablecoins for payments. Data shows that Ethereum handled stablecoin transactions worth over $8 trillion in the last quarter alone. With stablecoins being in their infancy, there is a likelihood that they will start to take market share from PayPal.
PayPal has entered the stablecoin industry through its PYUSD coin, which has over $3.7 billion in assets and handled over $15 billion in volume in the last 30 days. The number of its addresses has jumped to 74.8k
The challenge, however, is that its revenue will be negligible unless it gets to a much higher amount. Assuming that PayPal invests all these funds in government bonds that are yielding 4%, it means that its annual revenue will be $148 million.
Attractive valuation, but risks remain
The only good thing about PayPal is that its business has become highly undervalued. It has a forward price-to-earnings (PE) ratio of 10, which is lower than the S&P 500 Index’s 22. This valuation multiple is also smaller the sector median of 10 and its five-year average of 25.
The main reason for this valuation is that analysts don’t expect much growth in the future. For example, the average revenue growth estimate among analysts is 4.68% followed by 5.75% in 2026. This growth metric is much lower than the average S&P’s estimate of 8.6%.
PayPal is working to make its stock attractive, including by aggressively buying back its stock. It has also started paying a dividend. However, these measures will likely not boost the stock unless the company starts growing.
PayPal stock price technical analysis
The weekly chart shows that the PYPL stock price has been under pressure in the past few months. It has dropped from a high of $92.6 in January last year to the current $57.
The stock has formed a descending triangle pattern, a popular continuation sign. It also remains below all moving averages, while its Relative Strength Index (RSI) and the MACD have all pointed downwards.
Therefore, the most likely scenario is where the stock makes a bearish breakout and moves below $50.
READ MORE: PayPal stock price forecast: Is this fintech giant a buy?
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