What Are PayPal Stock Bulls Not Worried About? Trefis Team Fri, November 13, 2026 at 12:04 PM EST 3 min read PYPL ^GSPC V MA SHOP Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
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PayPal (PYPL) shares have gained 30.2% over the past six months, compared with 1.8% for the S&P 500. Investors who bought into management's turnaround are banking on fast growth from Venmo, Pay Later and other financial services, while relying on the PayPal checkout button to at least keep its pace. The newer businesses command the spotlight, but the checkout button is where the risk sits. So how is the checkout button holding up?
PayPal's Checkout Button Is Holding, But Barely Growing
During the October 27, 2026 call, management said payment volume through the checkout button has grown between 1% and 2% for four quarters. The volume is neither shrinking nor accelerating. Management also said the end of an EU tax exemption known as de minimis affected some merchants, creating about 70 basis points of headwind to checkout volume growth.
There are brighter spots. Management said U.S. checkout volume improved for the third quarter in a row, and Germany stabilized. Still, management expects the same 1%-2% growth through the fourth quarter because it assumes the headwinds in Europe continue.
Management's own plan does not ask much of the button. It said it expects checkout volume to improve, though its growth plan does not require a full return to historical growth rates. So far, the button has held its pace.
Can Venmo And Financial Services Lift PayPal's Total?
Not yet. Transaction margin dollars grew about 2% in fiscal Q3 2026. Management calls growth in this profit measure its North Star, aiming for mid-single-digit growth over time.
The faster businesses are real. Management said financial services already make up more than 20% of transaction margin dollars and are growing at double digits. Venmo's payment volume has also grown at double digits for eight quarters in a row.
But the company as a whole slowed through 2026. Reported revenue growth fell from 7.2% in fiscal Q1 to 4.8% in fiscal Q2. In fiscal Q3 it was 2.0%, on revenue of $8.58 billion. So far, the newer businesses have not been big enough to lift the total.
Investors are paying a low price for PayPal's earnings. The stock trades at 10.5 times its earnings over the last twelve months, compared with 21.9 for the S&P 500. The stock is also 12.5% below its highest close of the past year, which was $66.66 on November 11, 2025.
PayPal Plans A Checkout Fix That Takes Years
Management said it plans to "invest further in both transaction margin dollars and operating expenses" in 2027, and it is targeting 2027 non-GAAP EPS growth similar to 2026's, when it expects non-GAAP EPS of about $5.60. It said it is underwriting its checkout spending to about a two- to three-year horizon, and that it is still early.
That timeline means any repair to the checkout button will come over years, not quarters. If checkout volume slipped below its current pace, Venmo and financial services would have more ground to cover before total growth reaches management's target.
For now, the checkout button is holding its pace, and the newer businesses are growing fast but not yet lifting the total. When PayPal next reports, expected in February 2027, watch payment volume growth at the checkout button and growth in transaction margin dollars.
Does This Mean You Should Act On PYPL?
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