Can PayPal's New Ads Manager Drive Top-Line Growth in 2026?

PayPal Holdings PYPL stock gained 4.7% during yesterday’s trading session on the NYSE, following the recent announcement of the launch of PayPal Ads Manager. It is a new platform designed specifically for small businesses that allows them to leverage their website traffic and generate new revenue streams. The platform is set to be available in early 2026, beginning in the United States and subsequently expanding to the United Kingdom and Germany.

PayPal’s tens of millions of merchants provide a solid base across more than 200 markets. This uniquely positions the company to support small to medium business advertising success through this comprehensive platform.

PayPal's Ads Manager launch positions the company to capitalize on the growing retail media. Retail media networks have evolved into a multi-billion-dollar sector, driving high-margin growth by allowing businesses to monetize their websites and apps via targeted advertising.

Apart from the launch of PayPal Ads Manager, PayPal has taken some strategic initiatives to generate business. It recently offered U.S. customers the ability to earn 5% cash back on Buy Now, Pay Later purchases through the end of this year. It also introduced PayPal World for seamless global wallet interoperability and formed a strategic AI-powered partnership with Google to enhance checkout and payment experiences.

The company is also heavily investing in AI for personalized commerce, fraud detection and expanding crypto integration within its app. Focused on emerging markets, PayPal is transforming into a full commerce platform, extending beyond payments by leveraging advanced, data-driven tools to boost merchant growth and consumer loyalty worldwide.

What Are Amazon & Walmart Doing in the Ads Manager Platform?

Amazon.com’s AMZN Amazon Ads offers products and solutions for every marketing objective. It provides high conversion rates compared to typical e-commerce conversion rates on other platforms. Amazon Ads generates 36% of sales for U.S. small businesses. In second-quarter of 2025, Amazon Advertising Services sales were $15.69 billion, up 23% year over year.

Walmart’s WMT U.S. retail media arm, Walmart Connect, offers deep omnichannel integration, delivering ads across online, in-store and mobile apps. The company continues to invest heavily in AI and analytics to optimize ad performance. WMT’s Walmart Connect revenues jumped 31% year over year in the first quarter of fiscal 2026.

PYPL’s Price Performance, Valuation & Estimates

Shares of PayPal have declined 11.4% year to date, underperforming both the broader industry and the S&P 500 Index.

From a valuation standpoint, PayPal shares are trading cheaply, as suggested by the Value Score of A. In terms of forward 12-month P/E, PYPL stock is trading at 13.17X, which is at a significant discount to the Zacks Financial Transaction Services industry’s 22.01X.

PayPal’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2025 EPS has been revised upward over the past month. The Zacks Consensus Estimate for 2025 EPS suggests 12.5% growth year over year.

PayPal currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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