BTIG has reiterated its Neutral rating on PayPal Holdings, Inc. (NASDAQ: PYPL) as the payments company approaches its fourth-quarter 2025 earnings release scheduled for February 3. The reaffirmation comes while shares trade around $56.62.
According to BTIG analyst Lance Jessurun, PayPal shares have slid roughly 19% since the company reported third-quarter 2025 results. The analyst attributes the weakness to reduced investor expectations for 2026 trade margin dollars and for adjusted earnings per share growth. Current market data show PayPal trading close to its 52-week low of $55.02, and the stock is down more than 27% over the past six months.
Management has previously signaled that growth in fiscal year 2026 will slow, and that operating expenses are expected to expand at the same rate as trade margin dollars. Wall Street consensus forecasts call for trade margin dollar growth of 4% in FY26, a decline from an estimated 6% in FY25. Adjusted EPS growth is projected at 8% for FY26, versus 15% for FY25.
BTIG highlights a mixed valuation picture. On one hand, PayPal carries an estimated free cash flow yield of about 12% for FY25, has initiated a dividend with a yield around 0.99%, and has announced roughly $6 billion in share repurchases. On the other hand, the research firm points to uncertainty over the company’s prospective performance. InvestingPro analytics referenced by the research note indicate PayPal is trading well below its Fair Value and carries a price-to-earnings ratio near 11.36.
The firm views PayPal’s planned 2026 investments - including agentic commerce capabilities, expanded buy-now-pay-later offerings, and initiatives to boost engagement with existing products - as appropriate priorities. However, BTIG does not expect clear returns on those investments until at least fiscal 2027. Despite market concerns, PayPal retains a Piotroski Score of 9, reflecting what the analysis describes as solid financial health.
In related corporate activity, PayPal recently agreed to acquire Cymbio, a multi-channel orchestration platform intended to enhance the company’s AI commerce capabilities and improve product discoverability on AI-driven shopping surfaces. The company also announced a partnership with tax technology platform april to provide free tax filing for U.S. PayPal Debit Mastercard customers, a program that the company says could save users roughly $160 in filing fees. The tax filing service will be delivered through april’s DIY platform.
Other brokerages have taken positions consistent with cautious sentiment. Jefferies reiterated a Hold rating on PayPal, citing a slowdown in UK eCommerce growth and maintaining a $60.00 price target. Raymond James kept a Market Perform rating while lowering estimates for Q4, citing a potential deceleration in Branded Total Payment Volume growth. Daiwa Securities downgraded the stock from Outperform to Neutral, pointing to concerns about declining market share and setting a revised price target of $61.00.
These analyst moves and the company’s strategic investments frame the near-term narrative for PayPal: attractive valuation metrics and shareholder-return actions contrasted with tempered growth forecasts and a timeline for realized returns that may extend into FY27. Investors will be watching the February 3 earnings report for additional clarity on trade margin dollar trends, expense pacing, and progress on the initiatives highlighted by management and analysts.
Summary
BTIG reaffirmed a Neutral rating on PayPal ahead of its Q4 2025 earnings, citing weaker investor expectations for 2026 and uncertainty over near-term returns from strategic investments. The stock has declined materially since Q3 2025 and is trading near its 52-week low.
Key points
- PayPal shares have fallen about 19% since Q3 2025 results and are trading near a 52-week low of $55.02.
- Analysts now expect 4% trade margin dollar growth in FY26 and 8% adjusted EPS growth, down from 6% and 15% in FY25, respectively.
- Valuation factors include an estimated 12% FY25 free cash flow yield, a newly established 0.99% dividend yield, and approximately $6 billion in buybacks, yet uncertainty about future performance remains.
Risks / uncertainties
- Slower growth in FY26 and operating expenses that are expected to rise at the same pace as trade margin dollars pose execution risk for margins and earnings - impacting payments and fintech sectors.
- Potential deceleration in regional eCommerce activity, such as the slowdown cited in UK eCommerce growth, could weigh on transaction volumes and branded TPV - affecting eCommerce and retail markets.
- Market-share erosion concerns cited by analysts introduce uncertainty about competitive dynamics and future revenue growth - relevant to payments, BNPL services, and digital commerce platforms.