PayPal Gets Credit For Execution On Checkout And Venmo, But Questions Linger – PayPal Holdings (NASDAQ:PYPL)

PayPal Holdings Inc PYPL shares are trading lower on Wednesday. Several analysts lowered the price forecast/rating on the stock after first-quarter results reported on Tuesday.

Quarterly revenue growth was 1% year-over-year to $7.79 billion, missing the analyst consensus estimate of $7.84 billion. Adjusted EPS was $1.33, beating the analyst consensus estimate of $1.16.

PayPal expects a second-quarter adjusted EPS of $1.29-$1.31, compared to $1.19 for the previous year’s period, and the analyst consensus estimate is $1.21.

PayPal reiterated full-year 2025 adjusted EPS of $4.95-$5.10, compared to $4.65 Y/Y. Currently, analysts estimate an EPS of $5.01.

RBC Capital Markets analyst Daniel R. Perlin slashed the price forecast for PYPL from $104 to $88, while keeping an Outperform rating.

The analyst writes that despite ongoing complexities in the company’s transition, he sees near-term indicators supporting continued success.

The positive factors include Branded checkout (online) Total Payment Volume (TPV) maintaining a steady 6% year-over-year growth (excluding FX and Leap Day), with over 45% of U.S. transactions utilizing the latest technology.

Also Read: PayPal Says ‘Buy Now, Pay Later’ Users Spend 33% More, Make 17% More Transactions—Pushes For Global Rollout

Also, transaction margin dollars increased by 7% year-over-year and significant continued growth in Venmo monetization through Pay with Venmo and the debit card are tailwinds, adds the analyst.

Perlin considers the unchanged FY25 guidance prudent given the current uncertain macroeconomic and geopolitical environment, providing flexibility for the second half of the year.

The analyst revised FY25 revenue and adjusted EPS estimates to $32.12 billion and $5.10 (from $32.19 billion and $5.00, respectively), and FY26 estimates to $33.18 billion and $5.85 (from $33.70 billion and $5.80, respectively).

Canaccord Genuity analyst Joseph Vafi maintained a “Buy” rating with a price target of $96.00.

The analyst writes that the first quarter marked another quarter of steady progress in PayPal’s business realignment under its new CEO, Alex Chriss, who has been in the role for just over a year.

Vafi says that the quarter was notable for transaction-margin dollar growth contributions from both branded and, importantly, now unbranded payment volume.

While some on Wall Street expressed disappointment regarding revenue headwinds stemming from the non-renewal of certain low or negative-margin unbranded volume contracts in the last quarter, the analyst views this as a sound strategic move.

Vafi sees transaction-margin dollar growth as the key metric to monitor, at least in the near term.

Goldman Sachs analyst Will Nance writes that earnings positives include de-risked numbers, faster-than-expected branded checkout upgrades (45% of U.S. branded on newest integration), strong growth in Pay with Venmo TPV (50%+), debit card TPV (60%+), and BNPL (20%+), and improved Braintree yields.

Nance cited range-bound to slightly weaker branded checkout volumes and outperformance driven by credit products as a negative factor.

Overall, the analyst is cautious on the longer-term trends due to favorable margin dynamics (low-single-digit opex growth) and significant capital return/FCF.

JP Morgan analyst Tien-Tsin Huang slashed the price forecast from $90 to $75, maintaining an Overweight rating.

The analyst says that the results offered points for both positive and negative perspectives, but they feel incrementally better about the stock’s setup.

Positives include stable spending (excluding Leap Year), positive commentary on business diversification (US-China cross-border, retail/discretionary split), and a reiterated guide, which provides a second-half cushion, according to the analyst.

Huang says that negatives include slightly soft branded growth (+4% vs. JPMe +5%) and questions about the beat’s quality due to strong credit growth (easier comparison).

Strong product ramp-up (Venmo revenue +20%, 45% of U.S. on modern checkout) supports improving growth and execution in a stable macro, aligning with management’s investor day commitments, the analyst added.

Price Action: PYPL shares are down 1.6% at $65.20 at last check Wednesday.

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