The Motley Fool on $PYPL (Oct 27, 2026)
PayPal's growth has stalled: revenue and net income are growing only small single digits, and branded checkout — about 80% of profit — is stuck at 1-2% growth for four quarters, while faster-growing areas are just 20% of profit. With a 1% dividend and a 26% five-year share-count cut, it is neither an income nor growth story; the speaker says a sale is probably right and an acquisition is plausible, though the standalone case is not bad.
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PayPal is stalled, and we'll also discuss PayPal.
I want to quickly change the subject and talk about PayPal in this segment. PayPal's growth has slowed down a bit recently and I think that's the main issue right now. You will see very small, single- digit growth in revenue and net income.
Does this earnings report increase or decrease PayPal's chances of finding buyers? Because there is a lot of speculation about whether PayPal will continue to exist on its own or whether someone else will buy them.
In answer to your question, what is the main point, leaving everything else aside ? This must be a branded checkout. The company wants you to focus on 'Buy Now, Pay Later', debit cards, and Venmo, which are doing well, but only 20% of the total profit comes from here.
Branded checkout means the small button you can select to make an online payment. This is about 80% of PayPal's total profit. This is the core of the business. It is growing at a rate of 1 to 2 percent per year.
It has been stuck there for the last four quarters. This is what management is focusing on and I would hope that as they are focusing on it, we will see some growth there.
So this is something to pay attention to when it comes to acquisitions. I mean, the ending was pretty good. From revenue growth or other such aspects. So I would say that there is still an opportunity.
I would n't be surprised if an offer comes up in the future, but the argument for continuing it as a standalone business isn't bad at all. So you might want to be careful when choosing PayPal here.
Yes, the problem with branded checkout is that it's usually one of the six checkout choices, and I think that's why it's growing at a 1-2% rate. I don't know how it's possible to increase it without spending money.
Look, the metric I'm looking at, Tyler, is related to my answer as to whether they should sell. The number of shares has decreased by 26% in the last five years. Continue. They have bought back more than a billion dollars in shares.
The dividend yield should probably be higher. This is only 1%. This is not a story about income. This is not a growth story, not at all. Should they sell? Yes, probably. The agreement was the right move.
The buyer was wrong. I think it's past time now , but if the economy is bad and stock prices are down, it would make a lot of sense for a private equity buyer. This is probably more logical than being public at this time.
Somewhere , someone will want to get hold of that huge cash flow from PayPal, even if it's not used for growth. It can be used anywhere. Maybe someone will buy it.