PayPal introduced a new physical card that enables customers to use PayPal Credit for in-store purchases.With the addition of the PayPal Credit Card, which will be rolled out to customers in the United States in the coming weeks, this flexible financing option can be used online, in-store and everywhere Mastercard is accepted, the company said in a Tuesday (June 3) press release.“PayPal Credit is one of our most popular products, and customers have long been requesting the ability to use it on-the-go as the ...

Core Viewpoint - PayPal is expected to report flat to low single-digit revenue growth for Q1 2025, with non-GAAP earnings projected between $1.15 and $1.17 per share, indicating a year-over-year growth of 6-8% [1][2]. Financial Performance - The Zacks Consensus Estimate for Q1 revenues is $7.83 billion, reflecting a 1.64% increase from the previous year [1]. - The consensus for earnings is $1.15 per share, which is a decline of 17.86% compared to the same quarter last year [2]. Recent Developments - PayPal has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 14.26% [3]. - The company’s strong portfolio and partnerships are expected to positively influence Q1 results, particularly through initiatives like Fastlane and Venmo monetization [4][5]. Strategic Partnerships - PayPal's partnerships with major companies such as Amazon, Shopify, Apple, Alphabet, and Meta Platforms have been significant growth drivers [5][6]. - The integration of PayPal and Venmo cards into Apple Wallet and the addition of PayPal as a processor for Shopify Payments enhance operational efficiency for business owners [6]. Value-Added Services - PayPal is expanding its value-added services, including FX-as-a-service and network tokens for automated billing, which are expected to improve transaction margins [8]. - The launch of PayPal Everywhere is driving increased debit card adoption and creating new spending categories [8]. Stock Performance - PayPal shares have declined by 23.8% year-to-date, underperforming the Zacks Business Service sector and the Internet Software Industry [9]. - The stock is considered cheap, with a forward Price/Sales ratio of 1.91X, significantly lower than the industry average of 6.33X [12]. Long-Term Growth Prospects - PayPal's portfolio strength and investments in branded checkout and P2P services are expected to drive total active accounts and transaction margins [16]. - The company anticipates a transaction margin growth of at least 5% in 2025 and high-single-digit growth by 2027, with long-term growth projected at over 10% [17].

Core Viewpoint - PayPal (PYPL) shares are currently undervalued, trading at a forward 12-month P/E of 11.86X, significantly lower than the industry average of 22.34X and competitors like Visa, Mastercard, and Apple [1][5][19] Valuation and Performance - PayPal's P/E ratio is 11.86X compared to Visa's 27.39X, Mastercard's 31.51X, and Apple's 26.46X, indicating a cheaper valuation [1][5] - Year-to-date, PayPal shares have declined by 25.7%, underperforming Visa (up 7%), Mastercard (up 2.5%), and Apple (down 17.8%) [5][6] Competitive Landscape - The decline in PayPal's stock is attributed to increased competition in the fintech sector from companies like Visa, Mastercard, and Apple Pay, as well as a challenging macroeconomic environment [5][19] Growth Prospects - PayPal's strong portfolio and two-sided platform are enhancing relationships with merchants and consumers, driving total active accounts [11] - The adoption of Fastlane is expected to increase transaction volumes, with projected growth in transaction margin of at least 5% in 2025 and high-single-digit growth for 2027 [12][13] - New value-added services, such as FX-as-a-service and network tokens, are anticipated to improve merchant experiences and drive transaction margins [14] Partnerships and Collaborations - PayPal's expanding partner base, including Fiserv, Adyen, Amazon, and Shopify, is enhancing its market prospects [15][16] - Integration with Shopify Payments and collaborations with Amazon, Apple, and Google are creating a unified experience for business owners and increasing PayPal's reach [16] Earnings Guidance - PayPal has provided a non-GAAP earnings per share growth guidance of 6-10% for 2025, with expectations of over 20% growth in the long term [17] - The Zacks Consensus Estimate for 2025 earnings is $4.98 per share, reflecting a 7.1% growth over 2024 [17] Stock Performance Indicators - PayPal shares are currently trading below both the 50-day and 200-day moving averages, indicating a bearish trend [19][21] - The stock is rated as a Zacks Rank 3 (Hold), suggesting that investors should wait for a more favorable entry point [23]