PayPal Is Down More Than 80% From Its Peak. Here's Why I Still Own It
2026-10-23 11:52
•Matt Frankel, Cfp® •The Motley Fool
••••• • Axe Cap view
Why PayPal’s Steep Drop Isn’t Enough to Sell Just Yet
PayPal has lost over 80% from its peak but still offers value on cheap earnings and cash flow.
PayPal’s share price has taken a nosedive since the pandemic boom faded, dropping more than 80% from highs. Growth slowed because the explosion in online payments stabilized, and so did its user base. Yet, it’s trading at around 10 times forward earnings with $1.8 billion in free cash flow last quarter. PayPal is buying back sizable shares too, which could boost earnings per share by trimming the number of shares out there. That makes it an intriguing value play more than just a fading growth story. Locally, this is worth watching through USD/ZAR — a weaker rand could make dollar-based gains in PayPal stock look even better for South African investors. The risk? E-commerce could slow further or competitors might eat into PayPal’s slice, and then earnings might falter more than expected. But for now, it’s not a name to rush away from just because of a brutal selloff. this is just our opinion and not financial advice
I’d watch PayPal for opportunistic buys on weakness, using USD/ZAR swings to your advantage. Avoid adding large positions until we see clearer growth signals or sustained earnings momentum.
- PYPL
- USD/ZAR
- Slower e-commerce growth globally
- Rising competition in digital payments
5/10
PayPal stock has declined over 80% from its 2021 peak of $310 as pandemic-era e-commerce tailwinds faded and growth slowed to single digits. However, the author argues the stock presents a compelling value opportunity, trading at 10x forward earnings with strong free cash flow generation ($1.8B last quarter) and aggressive share buybacks. Despite modest 5% revenue growth and flat user base, the combination of modest profit growth and share count reduction could drive double-digit EPS growth.
Our take is based on reporting first published by The Motley Fool.