N※N

PayPal Poised for a Comeback: Why Investors Might Be Missing Out

68

  //stocks-investing.news-articles.net/content/202 .. comeback-why-investors-might-be-missing-out.html
  Published in Stocks and Investing on Tuesday, December 30th 2025 at 9:04 GMT by Forbes

• 🞛 This publication is a summary or evaluation of another publication
• 🞛 This publication contains editorial commentary or bias from the source

2025-10-27 225 x 224 / 9855 Bytes

2025-12-30 236 x 214 / 7996 Bytes

2025-12-30 250 x 202 / 9642 Bytes

Is PayPal Poised for a Comeback? Why Investors Might Be Missing a Golden Opportunity

For years, PayPal (PYPL) has been viewed by many investors as a company past its prime – a once-dominant force in online payments struggling to maintain relevance in an increasingly competitive landscape dominated by giants like Apple and Stripe. However, a recent analysis suggests this perception might be drastically underestimating the company's potential, presenting a compelling case for a significant rebound in PayPal stock. The Forbes article by Michael Bagel argues that current market sentiment is overly pessimistic and fails to account for several key factors driving a potential resurgence.

The Narrative of Decline: Why PayPal Has Been Out of Favor

To understand the argument, it's crucial to acknowledge the narrative surrounding PayPal’s recent performance. The company faced headwinds in 2023 and 2024 stemming from slowing e-commerce growth post-pandemic, increased competition for payment processing fees (particularly from Stripe), and concerns about its profitability. The shift towards "buy now, pay later" (BNPL) services also initially seemed to threaten PayPal's core business model. Furthermore, the company’s aggressive acquisition strategy in previous years, including Venmo, hasn’t always delivered the expected returns, contributing to investor skepticism. As highlighted by Bagel, these factors led to a significant decline in PayPal’s stock price and a general consensus that the company was losing its edge.

The Turning Tide: What's Changing at PayPal?

Despite this negative sentiment, Bagel contends that PayPal is undergoing a quiet transformation that investors are overlooking. Several key initiatives are contributing to a potential turnaround. Firstly, CEO Alex Chriss has implemented a series of strategic changes aimed at revitalizing growth and improving efficiency. These include:

• Focus on Core Business: Chriss is prioritizing the core payments business over chasing every trendy fintech niche. This means streamlining operations and focusing on areas where PayPal holds a clear advantage – particularly its massive user base and established brand recognition.
• Enhanced User Experience: PayPal is investing heavily in improving its mobile app and overall user experience, making it more intuitive and appealing to both consumers and merchants. The article points out that this includes simplifying the checkout process and integrating new features based on user feedback.
• Merchant-Centric Approach: Recognizing that merchant satisfaction is crucial for long-term success, PayPal is focusing on providing value-added services like fraud protection, data analytics, and marketing tools to its business clients. This aims to increase transaction volume and reduce churn. The Forbes piece references a recent survey showing improved merchant sentiment towards PayPal's offerings.
• AI Integration: PayPal is aggressively integrating artificial intelligence across various aspects of its operations, from risk management and fraud detection to personalized customer service and marketing campaigns. This promises significant efficiency gains and enhanced user engagement.

Beyond the Surface: The Undervalued Assets

Bagel’s argument goes beyond simply highlighting these operational changes; he emphasizes that PayPal possesses several undervalued assets that are not fully reflected in its current stock price. These include:

• Massive User Base: PayPal boasts over 400 million active users globally, a significant advantage over many competitors. This vast network provides a built-in distribution channel for new products and services.
• Venmo's Potential: While Venmo hasn’t yet achieved profitability, Bagel argues that its potential as a social payments platform is still largely untapped. Recent efforts to monetize Venmo through business accounts and enhanced features are showing early signs of promise (as detailed in Venmo's Q3 2025 earnings report).
• Xuma Capital: PayPal’s recent venture into BNPL with Xuma Capital, a joint venture with private equity firm KKR, is another area of potential growth. While still nascent, this initiative allows PayPal to participate in the rapidly expanding BNPL market without cannibalizing its existing business.
• Strong Balance Sheet: PayPal maintains a robust balance sheet with significant cash reserves, providing financial flexibility for future investments and acquisitions.

The Valuation Disconnect: Why Now is the Time?

Bagel concludes that the current valuation of PayPal stock – trading at a relatively low multiple of earnings compared to its peers – doesn’t accurately reflect the company's turnaround potential. He suggests that as investors begin to recognize these positive developments and the underlying value of PayPal’s assets, the stock price is likely to experience a significant re-rating. He compares PayPal's current situation to other tech companies that were once written off but subsequently rebounded due to strategic shifts and improved execution.

Risks Remain, But Opportunity Beckons

While Bagel presents a bullish case for PayPal, he acknowledges that risks remain. Increased competition, regulatory scrutiny, and macroeconomic headwinds could still impact the company's performance. However, he believes that PayPal’s proactive measures and undervalued assets position it well to navigate these challenges and capitalize on future opportunities. The article emphasizes that investors who are willing to look beyond the short-term noise and recognize PayPal’s long-term potential may be rewarded with a significant return.

Disclaimer: This is a summary based on the provided Forbes article and does not constitute financial advice. Investing in stocks carries inherent risks, and you should conduct your own research before making any investment decisions.