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Chicago, IL – December 1, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: PayPal Holdings' PYPL, Visa V and Mastercard MA.
Here are highlights from Friday’s Analyst Blog:
PayPal Holdings' stock has fallen 27.5% so far this year, mainly due to macroeconomic uncertainties and increased competition in the digital payments space.
Additionally, concerns about tariff-related challenges in Asia have contributed to short-term market volatility.
Competitors like Visa and Mastercard continue to expand their offerings, putting pressure on PayPal's leading position in digital payments. V stock has gained 5.7%, while MA has advanced 3.5% year to date.
Investors are now wondering if PayPal's problems show a bigger issue or if it's a good chance to invest for a long-term recovery story. Let's delve deeper into this.
PayPal has expanded beyond its original role as a payments company and is now transforming into a comprehensive commerce platform. The introduction of "PayPal Ads Manager" allows small businesses that use PayPal to become their own retail media network and generate new revenue streams. With "PayPal links", users can send and receive money easily using a personalized, one-time link that can be shared in any chat or conversation.
Additionally, "PayPal World" brings together several payment systems and digital wallets, such as PayPal, Venmo, Mercado Pago, Tenpay Global and NPCI's UPI, on a single platform. Merchants benefit by gaining access to billions of new customers, while consumers gain universal wallet acceptance across borders.
The company is also investing in AI-driven "agentic commerce" experiences in partnership with Anthropic and Salesforce, along with expanding crypto integration through its PYUSD stablecoin and "Pay with Crypto" option. Last month, PayPal announced that it would adopt Agentic Commerce Protocol with OpenAI to broaden payments and commerce in ChatGPT. These innovations extend PayPal's relevance well beyond traditional payments, potentially positioning it as a foundational player in next-generation digital commerce.
Venmo is positioned as the preferred money movement platform for the young, affluent and digitally native consumers. Venmo continues to accelerate, with revenues jumping 20% year over year in Q3 2025, while total payment volume (TPV) grew 14%, accelerating sequentially from 12% in the second quarter of 2025. Venmo is on track to generate $1.7 billion in revenues in 2025, excluding interest income. This reflects more than 20% upside and a 10-point acceleration compared to two years ago.
Moreover, Venmo debit card hit a new record in the third quarter, attracting 1 million first-time users, partly driven by college partnerships. Venmo debit card monthly active accounts surged more than 40%, while "Pay with Venmo" monthly active accounts grew by nearly 25%. Over the past two years, the company has doubled Pay with Venmo and Venmo debit card revenue.
Branded experiences remain another core driver. In the third quarter of 2025, branded experiences TPV grew 8% on a currency-neutral basis, outpacing the 5% growth in online-only branded checkout TPV. Online checkout and omni-initiatives accelerated U.S. branded experiences with TPV growing to 10% in the third quarter of 2025.
While debit card and tap-to-pay spend represent a small portion of branded experiences volume, they are growing rapidly, up 65% year over year. Together, Venmo and branded experiences represent PayPal's strongest growth pillars, reinforcing its competitive positioning in both digital and in-store payments.
However, with the decline, PayPal shares are trading cheap, as suggested by the Value Score of A. In terms of forward 12-month P/E, PYPL stock is trading at 10.62X compared with the Zacks Financial Transaction Services industry's 20.25X.
The stock is also cheaper than competitors, including Visa and Mastercard. Shares of Visa and Mastercard are currently trading at P/E of 25.52X and 28.99X, respectively.
PayPal's estimate revisions reflect a positive trend for full-year 2025 and 2026. The Zacks Consensus Estimate for 2025 earnings is pegged at $5.34 per share, suggesting 14.8% growth over 2024. The consensus mark for 2026 earnings stands at $5.87 per share, indicating a 9.9% increase year over year.
PayPal is concentrating on four key growth areas: winning checkout, scaling omni and Venmo, driving payment services profitability, and investing in next-gen vectors like AI, ads and stablecoins. The integration of Venmo into everyday commerce, along with introductions like PayPal Ads Manager, PayPal Links, PayPal World's, plus innovations in crypto and AI, positions the company for diversified revenue growth in 2026 and the years ahead.
PayPal's scale remains unmatched. With more than $458.1 billion in quarterly TPV, its global reach and merchant network offer resilience even when growth moderates. This combination of profitability, innovation and scale strengthens the long-term investment case.
Although short-term risks exist, they do not overshadow PayPal's long-term recovery. With a strong balance sheet and several innovation drivers, PayPal presents an attractive opportunity for investors. The current dip in its price performance seems excessive compared to its solid fundamentals. For long-term investors, PYPL looks more like a buy-the-dip opportunity than a time to exit.
PayPal currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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This article originally published on Zacks Investment Research (zacks.com).
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