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Exclusive Story

Why PayPal’s Rally Faded—And What Could Restart It

By Sam Quirke. First Published: 3/16/2026. 

Customer holding smartphone displaying PayPal app at a checkout counter, highlighting digital payments platform.

Key Points

  • PayPal shares popped last month after takeover speculation sparked renewed investor interest, but the rally is already losing momentum.
  • The stock remains near multi-year lows and trades at one of its lowest valuations ever, suggesting there could be meaningful upside if sentiment shifts.
  • However, for PayPal to maintain a rally, the company will need to impress investors with its next earnings report and prove its long-term relevance in digital payments.
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PayPal Holdings Inc. (NASDAQ: PYPL) seemed to be staging a long-awaited comeback at the end of February. After months of relentless selling that pushed the stock back to 2017 levels, shares jumped on rumors that payments giant Stripe was exploring an acquisition.

The speculation ignited a powerful rally, with PayPal shares popping as much as 25% from their multi-year lows. But once it became clear the takeover talk had no substance, much of that enthusiasm quickly faded. The stock retraced roughly 10% in mid-March and now looks poised to slide back toward its February lows. For the rally to regain traction, the company has to execute several things well—here’s what to watch.

Its Next Earnings Report Will Be Key

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A major catalyst for PayPal’s next move will be its next earnings report in early May. After a difficult start to the year, the company needs to convince investors that its growth story isn’t terminally declining.

Last month, PayPal reported results that fell short of expectations: revenue and earnings missed analyst forecasts, and management issued cautious guidance for the year ahead. Investors took the outlook as evidence PayPal is losing share in areas where it once dominated. To reignite the rally, May’s report will need to show stabilizing growth and a credible plan to regain competitive momentum.

PayPal Must Prove It Is Not Yesterday’s Story

Beyond a single quarter, PayPal faces a broader perception challenge. The company was once one of the dominant gateways for e-commerce, but the rapid evolution of digital payments has produced a far more competitive landscape.

Merchants and consumers now have many more payment options: mobile wallets, alternative providers and integrated checkout solutions have all expanded rapidly. That increased choice has pressured PayPal’s branded checkout business, historically one of its most profitable products, which has seen growth slow compared with prior years.

That slowdown is meaningful because branded checkout typically carries higher margins than PayPal’s unbranded processing services. Weaker growth in that segment strains overall profitability and raises questions about the company’s long-term positioning. Adding to the uncertainty is a recently reported class action lawsuit alleging PayPal misled investors about the growth potential of its payment platforms, which could further dent confidence.

To stabilize its share price and rebuild momentum, PayPal must convince investors it remains a core player in the evolving digital payments ecosystem—not a legacy platform being overtaken by newer competitors in financial services.

Valuation Suggests the Stock May Be Too Cheap

The good news for prospective buyers is that PayPal’s current valuation appears to price in a lot of pessimism. Trading around $45, the stock has a price-to-earnings ratio of roughly 8—historically low for PYPL. Such a valuation implies investors expect limited growth, and that a downside scenario is largely baked in.

Still, some cautious analysts see upside from current levels. In March, Bank of America and KGI Securities rated the stock Neutral (or equivalent). Their refreshed price targets—$48 and $55, respectively—remain meaningfully above the current share price, suggesting some analysts believe the market may be overly pessimistic.

The Next Move Will Depend on Execution

Ultimately, PayPal’s next move hinges on execution. The brief rally sparked by takeover rumors showed how quickly sentiment can shift, but speculation isn’t a sustainable foundation for a long-term recovery.

PayPal needs to demonstrate through results that its business remains relevant in a crowded market. Improving growth metrics, stronger margins and a clearer strategic direction would help restore investor confidence. If management can deliver those signals in the coming weeks and months, the rebound that briefly took shape last month could evolve into a more durable rally.

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Published by RJ Hamster

I was born on 6 August 1956 in San Francisco, California to Janet and (the late) Richard Hovis. I grew up in Santa Monica, California where I attended elementary, junior high school, and high school (graduating in 1974), in addition to involvement in sports and recreation (Little League +, the Boy’s Club ++). Further, it was in elementary school – St. Augustine’s By-the -Sea Parish School that I found, and made the choice to truly journey with God. I attended Arizona State University from 1974 to 1977 – seeking to become an architect, however, I was not accepted, and, as such, I graduated with a Liberal Arts degree. Upon graduation from Arizona State University, I attended Cal Poly San Luis Obispo and studied City and Regional Planning at the Master’s level. I successfully completed one (1) year in a two (2) year program – I did not complete the Master’s degree in City and Regional Planning – due to personal reasons. I returned to Santa Monica where I started (October 1979) my career as graphic designer with Exxon Company, USA. I spent five years with Exxon Company, USA. While working with Exxon Company, USA I was accepted into architectural school – Sci-Arc in Southern California, however, I did not attend preferring to stay with Exxon.. In 1982 I married Laura Flosi and in April 1983 we had our one and only child – Lauren Alain Hovis – a gift from God. We moved to Phoenix, Arizona in 1984 from Los Angeles, where I went to work as a graphic designer with Kitchell CEM (from 1985 -1987). From 1987 – 1995 I was an independent contractor, and a registered representative in mortgage finance, financial management, graphic design, and drafting. Further, I attended the University of Phoenix and successfully obtained a Master’s in Business Administration (MBA) in 1982. I was also a member of the Scottsdale Jaycees, where I became very involved in community events and projects. In 1994, I accepted a cartography position with the Defense Mapping Agency in Reston, Virginia. As such, I relocated from Phoenix to Reston. In 1998, I was accepted and worked as a Visual Information Officer with the Central Intelligence Agency. In 2002, I worked as a Support Officer until my retirement (due to a need for shoulder surgery) in September 2018. Away from my Federal Government service, I have been involved in various organizations and activities in Northern Virginia. In November of 2011, I married Rebecca Ouellette in Santa Monica, California. I reside in San Tan Valley, AZ with my two hamster - Jess and Timothy, our fish, our lizard - RJ Lizard., and our cats - Pearl and Grey. As to hobbies, I enjoy playing sports, attending sporting events, mentoring individuals from financial management to hamsters, building models, photography, travel, multimedia design, managing partner for RJ Hamster, and jazz – smooth jazz to a samba or a bossa nova. Love and God Bless, Peter – aka RJ Hamster Jo hi

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