PayPal stock price crash has more room to go: here's why

Core Viewpoint - PayPal's stock has significantly declined, facing challenges in growth and competition, particularly from stablecoins, leading to a low valuation despite potential attractiveness [1][2][5]. Group 1: Stock Performance - PayPal's stock price has dropped to $57.25, down 38% from its highest level in 2025, with market capitalization falling from over $100 billion to $54 billion [1]. - The stock has formed a descending triangle pattern and remains below all moving averages, indicating bearish trends [9]. Group 2: Business Challenges - PayPal's revenue growth has slowed to 7% in Q3, significantly lower than historical double-digit growth rates [2]. - Rising competition from stablecoins like USDC and USDT is impacting PayPal, as transaction costs for PayPal are over 2%, while stablecoin transactions cost only a few pennies [3]. Group 3: Stablecoin Market - Ethereum processed stablecoin transactions worth over $8 trillion in the last quarter, indicating a growing market that could take share from PayPal [4]. - PayPal's own stablecoin, PYUSD, has over $3.7 billion in assets and handled over $15 billion in volume in the last 30 days, but revenue from this will be negligible unless it scales significantly [4]. Group 4: Valuation and Growth Outlook - PayPal's forward price-to-earnings (PE) ratio is 10, lower than the S&P 500's 22 and the sector median of 10, indicating undervaluation [5]. - Analysts project average revenue growth of only 4.68% for PayPal, significantly below the S&P's estimate of 8.6%, suggesting limited future growth potential [6].