Finance
PayPal Trades at Under 10X Earnings — Is the Stock Cheap for a Reason?
Alex Chriss began his tenure as CEO of PayPal Holdings (NASDAQ: PYPL) in the fall of 2023. Chriss came over from Intuit, and investors hoped that he would breathe new life into one of the oldest fintech companies.
Despite unveiling some fresh ideas and pushing PayPal to rethink its user experience, PayPal apparently didn’t see results quickly enough. In February, PayPal announced it had replaced Chriss with Enrique Lores, stating the company had been dissatisfied with progress over the past two years.
Investors have endured years of miserable performance from PayPal stock, and shares have dropped to less than 10 times earnings today. Is it finally time to look for a turnaround, or is PayPal’s low valuation a trap waiting to ensnare your capital?
There are changes ahead, yet again, for this fintech legend.
Alex Chriss began his tenure as CEO of PayPal Holdings (PYPL +0.22%) in the fall of 2023. Chriss came over from Intuit, and investors hoped that he would breathe new life into one of the oldest fintech companies.
Despite unveiling some fresh ideas and pushing PayPal to rethink its user experience, PayPal apparently didn’t see results quickly enough. In February, PayPal announced it had replaced Chriss with Enrique Lores, stating the company had been dissatisfied with progress over the past two years.
Investors have endured years of miserable performance from PayPal stock, and shares have dropped to less than 10 times earnings today. Is it finally time to look for a turnaround, or is PayPal’s low valuation a trap waiting to ensnare your capital?
Image source: The Motley Fool.
Failure to build around a strong, but stagnant, legacy business
PayPal is still one of the most prominent fintech brands, with approximately 439 million active users as of the fourth quarter of 2025. This is measured as anyone with at least one transaction over the past 12 months. The company offers various payment products and services, including branded and white-labeled payment processing (Braintree), and it owns Venmo, the popular peer-to-peer payment app.
But PayPal has arguably become a stale brand. Apple and Alphabet have become major competitors in the mobile payments space with Apple Pay and Google Pay. Buy Now, Pay Later companies, such as Affirm and Klarna, have become increasingly popular with young consumers. This has shown up in the numbers. Sure, 439 million active users is a lot, but PayPal had 435 million at the end of 2022, so there isn’t much user growth happening.
PayPal leaned into advertising and a brand refresh under Alex Chriss, but PayPal’s branded checkout growth slowed drastically in the fourth quarter of 2025. Branded online checkout growth slowed to 1% in the quarter, down from 6% in the fourth quarter of 2024. Branded experiences as a whole slowed to 4% growth from 8% in the same quarter of the prior year.
The momentum loss likely factored into PayPal’s decision to move on from Alex Chriss.
PayPal
Today’s Change
(0.22%) $0.11
Current Price
$49.88
Why investors may want to show restraint here
PayPal stock is a bit of a conundrum for investors. If you look backward, PayPal has continued to grow its top and bottom lines despite all the worries over competition.
Data by YCharts.
I’ll admit that shares appear very cheap at under 10 times earnings. However, PayPal could face rougher waters ahead. The company guided its non-GAAP earnings to range between a low-single-digit decline and flat in 2026. Beyond that, PayPal has had three CEOs in roughly as many years. Different leaders have different opinions and ideas, and new CEO Enrique Lores is likely to push for more change, given that his predecessor lost his job because the current strategy isn’t working well enough.
Potential investors may want to consider staying on the sidelines for now. PayPal now needs more time to implement new ideas and show in the numbers that they are working. There’s investment upside if the new CEO finally rights this ship. That said, PayPal risks becoming a value trap, especially if its stagnant brand begins to weigh more on the company’s financials than it has to this point.