PYPL stock wobbles as PayPal raises 2026 profit outlook
PYPL stock is under the microscope after PayPal Holdings beat Wall Street's second-quarter earnings estimates, lifted its full-year 2026 adjusted profit forecast, and detailed multiyear cost-saving plans. The results matter because investors are still weighing a turnaround against a reported $60.50-per-share takeover bid that the board calls inadequate.
On Tuesday, PayPal said adjusted earnings were $1.38 per share for the quarter ended June 30, topping estimates of $1.28. Revenue rose 3% on a currency-neutral basis to $8.68 billion, ahead of the $8.47 billion analysts expected, according to Reuters reporting via Yahoo Finance.
Key Takeaways
- Adjusted EPS of $1.38 beat the $1.28 Street estimate as total payment volume rose 9% to $486.4 billion.
- PayPal now guides for about $5.38 in full-year adjusted profit, above the $5.31 consensus.
- The company targets $400 million in cost savings by year-end under CEO Enrique Lores.
- A reported $60.50-per-share Stripe-Advent offer values PayPal near $53 billion; the board sees it as inadequate.
- PYPL stock rose briefly in premarket trade, then was last down about 0.8% before the bell.
Did PayPal's latest quarter show a real turnaround?
Management framed the print as progress. New CEO Enrique Lores, who replaced Alex Chriss in February after the board said change and execution lagged, said he was encouraged by urgency around the transformation plan and growth strategies.
Total payment volume increased 9% on a currency-neutral basis to $486.4 billion. That also offered a read on U.S. consumer spending, which has stayed resilient despite elevated borrowing costs.
Margin pressure remains a watchpoint. Adjusted operating margin was 17.4% in the second quarter, down 248 basis points from 19.8% a year earlier, as mix has shifted toward lower-margin businesses and competition has weighed on higher-margin branded products.
What is PayPal doing to cut costs and rebuild growth?
PayPal outlined overlapping initiatives: simplifying its operating model and cutting organizational layers through 2027, improving marketing efficiency through 2028, and continuing technology modernization and AI integration through 2029. It expects to save $400 million in costs by year-end.
For the third quarter, the company forecast a low single-digit decline in adjusted profit. Analysts, on average, expect earnings to fall about 0.4%, or 1 cent, from last year's $1.34 per share, per LSEG estimates cited by Reuters.
Full-year adjusted profit guidance of about $5.38 per share sits above Wall Street's $5.31 expectation. PayPal had previously pointed to a low single-digit decline to a slight increase in 2026 profit.
Why do sale questions still hang over PYPL stock?
Reuters reported earlier this month that Stripe and Advent International offered $60.50 a share, a deal analysts labeled a "low-ball" versus PayPal's pandemic-era peak near a $360 billion valuation in 2021. The board considers the offer inadequate.
Competition from Apple and Google's smartphone-embedded payments has eroded PayPal's standalone edge. For readers tracking wealth and market moves, more coverage lives in our Net Worth & Wealth hub.
Investors still want clearer proof that PayPal can regain share and accelerate growth. Until then, PYPL stock will trade at the intersection of earnings delivery and lingering takeover talk.