How PayPal lagged the 2025 market rally and faces another weak year

2026-01-11 11:45:42

Source: CryptoNewsNet Original Title: How PayPal lagged the 2025 market rally and faces another weak year Original Link:

Market Performance Gap

PayPal’s stock (PYPL) remained stagnant throughout 2025’s bull run, while tech peers surged dramatically and Bitcoin reached $126,000. The stock has been in a downtrend for months, dropping another 1% on January 9 to close at $57.66.

Insider activity tells a concerning story: insiders sold PYPL in Q4 2025 with no purchases, while short sellers profited significantly from the stock’s decline.

Retail Investor Sentiment Collapse

Online sentiment has turned severely negative. Reddit sentiment scores hit 12 out of 100—essentially rock bottom. Retail traders report substantial losses, with viral posts documenting the frustration:

One trader posted about being down $20,000 on the “garbage stock”
A highly upvoted post from someone holding $100,000 in stock, down 20k, questioned whether to exit for SPY puts
Community discussions reveal widespread support group dynamics among affected investors

Earnings Beat vs. Stock Performance Disconnect

PayPal beat earnings in eight of the last nine quarters, yet the market remains unmoved. The stock is down 38% from $93.03 and down over 80% from its 2021 peak of $231.38, now trading near its 52-week low of $55.72.

Historically, PayPal has experienced severe drawdowns: 20% in 2018, 31% during COVID, and over 83% during the inflation spike.

Wall Street Downgrades Intensify

Major investment banks have turned negative:

Goldman Sachs, JPMorgan, Morgan Stanley, and Bank of America all downgraded PYPL heading into 2026
Jefferies maintained a Hold rating with a $60 price target (barely above current levels)
Analyst coverage is split: 20 Buy, 20 Hold, 4 Sell ratings among 44 analysts
Price targets range widely from $51 to $120

Regional Growth Concerns

Jefferies flagged significant headwinds in Germany, which represents 20% of branded payment volume and 25% of transaction margins. TPV growth expectations have been cut from 5% last quarter to just 2%.

Valuation Puzzle

Despite trading at a reasonable 10x forward earnings with 31% quarterly earnings growth and a perfect Piotroski Score of 9, investors remain skeptical. The market appears to have lost confidence in the company’s growth narrative regardless of fundamental metrics.

Earnings are due in 35 days.

BTC2,89%

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.