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Should You Buy PayPal Stock Before Oct. 28? | The Motley Fool

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  Published in Stocks and Investing on Monday, October 27th 2025 at 10:22 GMT by The Motley Fool
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Should You Buy PayPal Stock Before October 28?

The latest commentary from The Motley Fool examines whether investors should purchase PayPal (PYPL) shares ahead of the October 28 earnings announcement. The article synthesizes recent financial data, macro‑economic factors, and the company’s strategic initiatives to arrive at a clear investment recommendation. Below is a detailed summary of the key points, insights, and supporting evidence presented in the article.

1. PayPal’s Recent Performance

PayPal’s most recent quarterly report, released in late September, highlighted mixed results. Revenue rose 9% YoY to $6.2 billion, driven largely by growth in the “PayPal Pay in 4” and “Afterpay” payment options. However, the company’s operating margin slipped to 9.6% from 10.4% in the same quarter a year earlier, reflecting increased marketing and technology expenditures.

Earnings per share (EPS) for the quarter were $0.61, beating consensus estimates of $0.58, giving analysts a modest upside. The company’s balance sheet remains solid, with $2.3 billion in cash and equivalents and a manageable debt load of $1.5 billion. Importantly, the quarterly guidance indicates a slight decline in gross merchant volume growth, citing increased competition from other digital‑wallet providers.

2. Strategic Growth Drivers

The article emphasizes three major catalysts that could underpin future upside for PayPal:

1. Expansion of PayPal Pay in 4 and Afterpay
   PayPal has aggressively expanded its buy‑now‑pay‑later (BNPL) services. PayPal Pay in 4 now supports over 3 million merchants, and Afterpay—an Australian‑origin BNPL brand acquired in 2022—has reported a 19% increase in active users during Q3. Analysts project that a broader merchant adoption of BNPL could lift transaction volumes and, consequently, revenue.

2. Cross‑border e‑commerce Growth
   Global e‑commerce penetration continues to rise. PayPal’s international transaction volume grew 13% YoY, and the company is betting on expanding its presence in emerging markets such as Southeast Asia and Latin America. A new partnership with a major Southeast Asian payment platform is expected to unlock an additional $1 billion in transaction volume by 2027.

3. Cryptocurrency Integration
   PayPal announced a pilot program in July allowing customers to buy, hold, and sell select cryptocurrencies directly from their PayPal wallet. Early data shows the program has attracted 4% of the user base and contributed $200 million in additional transaction fees in the first month. The article highlights the potential for further monetization through “crypto‑to‑fiat” conversions.

3. Macro‑Economic Context

The article contextualizes PayPal’s performance against broader macro‑economic forces:

• Inflation and Consumer Spending
  While inflation remains a concern, consumer spending on discretionary goods continues to rebound. PayPal’s data indicates that online spending grew 7% YoY in Q3, suggesting resilient demand for digital payments.

• Interest Rate Environment
  With the Federal Reserve tightening policy, the cost of capital has increased. PayPal’s cost of debt rose 2% last year, but the company’s diversified revenue streams cushion the impact. Analysts believe the company can maintain profitability even in a higher‑rate scenario.

• Competitive Landscape
  Amazon Pay and Apple Pay are gaining market share, but PayPal’s superior merchant network and BNPL offerings provide a competitive moat. The article references a Gartner report that projects PayPal will retain 30% of the digital‑payment market share through 2028.

4. Technical Analysis

The Fool’s technical review indicates that PayPal’s stock has been consolidating in a range between $30 and $36 for the past two months. The 200‑day moving average currently sits at $34, offering a “buy” signal if the price breaks above the upper resistance level. A relative strength index (RSI) of 58 suggests the stock is neither overbought nor oversold, creating a favorable entry point.

5. Risks and Red Flags

While the article leans bullish, it outlines several potential pitfalls:

• Regulatory Scrutiny
  PayPal faces increased scrutiny from regulators in the EU over data privacy and from the U.S. over anti‑trust concerns. A potential fine could weigh on the stock.

• BNPL Saturation
  The BNPL market is becoming crowded. If PayPal cannot differentiate its services, it may lose market share to newer entrants such as Klarna or Zip.

• Crypto Volatility
  PayPal’s crypto revenue is still a small fraction of total earnings, but a sudden drop in cryptocurrency prices could hurt the new revenue stream.

6. Analyst Sentiment

According to the article, over 80% of financial analysts who cover PayPal have raised their target prices in the last six months. The consensus target price now sits at $42, up 18% from the previous estimate. The average analyst rating is “buy.” The article cites a Bloomberg interview where a senior analyst notes that PayPal’s cost structure is highly scalable, and its strategic investments in BNPL and crypto are “high‑return, low‑risk” playbooks.

7. Bottom‑Line Recommendation

Taking into account the company’s earnings momentum, strategic growth initiatives, macro resilience, and bullish analyst sentiment, The Motley Fool advises buying PayPal shares before the October 28 earnings report. The article stresses that the stock is currently trading below its 12‑month moving average, providing a low‑entry point for new investors.

The recommendation is qualified: investors should monitor the company’s progress in expanding BNPL and crypto services, and keep an eye on regulatory developments. If PayPal delivers on its quarterly guidance and continues to grow its transaction volume, the stock could see upward momentum that justifies the suggested purchase.

8. Additional Context from Followed Links

The article links to several supplemental sources that enrich the narrative:

• PayPal Q3 2024 Earnings Call Transcript – Provides deeper insight into management’s outlook on BNPL adoption and the status of crypto integration.

• Gartner Digital Payments Market Share Report 2024 – Confirms PayPal’s projected 30% market share retention through 2028, bolstering the competitive moat argument.

• Bloomberg Analyst Interview – “PayPal’s Scalable Growth” – Offers quantitative backing for the company’s cost‑efficiency and projected earnings multiples.

• SEC Filings – 10‑Q for Q3 2024 – Highlights PayPal’s debt restructuring plans and projected cash flows, reinforcing the financial stability assessment.

These linked resources provide robust evidence supporting the article’s bullish stance, giving investors a comprehensive view of PayPal’s current standing and future prospects.