PayPal Holdings, Inc. (NASDAQ:PYPL) is trading at a significant discount compared with its peers, creating interest among investors tracking PayPal Stock 2026. With a forward 12-month price-to-earnings (P/E) ratio of 10.25X, PYPL is well below the Zacks Financial Transaction Services industry average of 21.12X. By comparison, peers Visa (NYSE:V) and Mastercard (NASDAQ:MA) trade at much higher multiples of 26.84X and 30.47X, respectively, highlighting PayPal’s attractive relative valuation.
Despite a 10.6% decline over the past three months, compared to the industry’s 1% drop, PayPal’s fundamentals suggest potential for recovery. Paypal stock’s Value Score of A indicates it is currently undervalued, yet macroeconomic uncertainty and intense competition in fintech temper short-term expectations.
Improving Earnings Outlook Signals Potential
Recent revisions to PYPL’s earnings estimates reflect positive momentum. The Zacks Consensus Estimate projects full-year 2025 earnings at $5.34 per share, a 14.8% increase over 2024. For 2026, EPS is expected to rise to $5.86 per share, representing 9.7% year-over-year growth. These upward revisions underscore improving fundamentals that may not yet be reflected in the stock price, making PayPal stock appealing to long-term investors.
Strategic Partnerships and Innovation Drive Growth
PayPal is expanding its ecosystem through strategic partnerships designed to strengthen agentic commerce capabilities. Collaborations with Logicbroker and Perplexity integrate PYPL’s services into AI-driven retail, enabling seamless in-chat checkout and discoverable merchant services. PayPal also adopted the Agentic Commerce Protocol with OpenAI, signaling its commitment to next-generation commerce solutions.
Additionally, PayPal and Venmo customers gain early access to Perplexity’s AI-powered Comet browser, including a complimentary 12-month Perplexity Pro subscription. These partnerships position PayPal as a foundational player in the emerging agentic commerce and AI-powered payments space.
Other growth initiatives include “PayPal Links,” enabling simple money transfers via personalized links, and “Pay in 4,” a no-fee Buy Now, Pay Later solution for Canadian users. Together, these offerings enhance user engagement while supporting the company’s revenue diversification strategy.
Transforming Into a Comprehensive Commerce Platform
PayPal is transitioning from a traditional payments provider into a broader commerce platform. The company has filed to establish PayPal Bank in Utah, offering small business lending, interest-bearing savings accounts, and direct access to U.S. card networks to streamline payment processing.
Through “PayPal World,” the company integrates PayPal, Venmo, Mercado Pago, Tenpay Global, and NPCI’s UPI, giving merchants access to billions of consumers and enabling universal wallet acceptance. PayPal is also deepening its cryptocurrency initiatives, including the PYUSD stablecoin and “Pay with Crypto” functionality, to remain relevant in evolving digital commerce markets.
Venmo Powers PYPL Growth
Venmo remains a key growth driver, particularly among digitally native and affluent consumers. Initiatives like Venmo Stash, a rewards program, and partnerships with Bilt, allow users to pay rent and shop while earning rewards.
In 2025, Venmo is projected to generate $1.7 billion in revenues, excluding interest income—over 20% growth and a notable acceleration from prior years. The Venmo debit card reached 1 million first-time users in Q3 2025, and monthly active accounts for both debit card and “Pay with Venmo” services grew 40% and 25%, respectively. This expansion underlines Venmo’s critical role in PayPal stock growth.
How to Approach PayPal Stock
Despite short-term headwinds, PayPal’s discounted valuation and improving fundamentals suggest a potential opportunity for long-term investors. PYPL trades well below its peers, yet benefits from upward earnings revisions, strategic partnerships, platform expansion, and Venmo growth.
While macroeconomic challenges and rising competition remain, the combination of innovation and ecosystem development supports optimism. Investors might consider monitoring PayPal stock closely and potentially adding shares on dips, keeping in mind the balance between risk and long-term growth potential.
Featured Image: Megapixl ©Andreistanescu
Author Stephanie Bédard-Châteauneuf 
