An analyst at Pearl Gray, an investment and research firm, has given PayPal (PYPL) a bullish outlook, calling it a “convexity play.” This means he sees PYPL’s upside potential outweighing its downside risk, even though the stock is currently volatile and under selling pressure. The analyst outlined two key factors to support this outlook.
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The analyst is bullish on the PayPal stock because he believes it has reached oversold levels. He noted that PYPL has declined by more than 80% over the past five years, largely due to the 2022 bear market. At the time, investors had grown more cautious and eventually neglected the stock, even after the bearish trend had ended.
As of 2026, PYPL continues to face challenges due to negative sentiment, ongoing lawsuits, and the recent CEO exit. As a result, the Pearl Gray analyst believes that PYPL’s downside risks are already priced in. This means the stock may have hit a bottom or could be close to reaching one. Based on this thesis, the analyst predicts a bullish reversal could happen soon.
He noted that a recovery could be triggered either by a new catalyst or by PayPal’s stable fundamentals, which could support the rally. Notably, PayPal has taken steps to strengthen its leadership by hiring a new CEO and appointing a new board member.
The payment giant’s nominal growth has also shown strength. FX-neutral total payment volume rose by 6%, while year-over-year revenue increased by 4% during fiscal 2025. This performance was further supported by a 6% rise in transaction margin and a 14% YoY growth in non-GAAP earnings per share.
PayPal Acquisition Rumors Add Upside Potential
Another major reason the Pearl Gray analyst is bullish on PYPL is the ongoing speculation that PayPal could be a takeover target. He said that the company’s low market capitalization makes it a tempting buy for firms like Stripe, which had shown interest in acquiring it in early 2026. The analyst also pointed to a possible acquisition by other tech giants, such as Amazon (AMZN).
According to the analyst, PayPal’s size, market share, and payments infrastructure make it a valuable asset. While a possible buyout is not the main reason for his bullish outlook, the analyst said it could give the stock a boost if investor interest grows.
Is PayPal a Good Investment Right Now?
According to TipRanks, PayPal (PYPL) stock remains a “Hold”, with 5 Buy, 25 Hold, and 4 Sell recommendations based on analysts’ ratings in the past 3 months. The company’s recent challenges, including slower growth in its branded checkout business and a weak Feb. 2026 earnings report, have weighed on its current ratings. For more information on the PYPL stock performance data, price targets, and analysts’ sentiment, visit TipRanks’ Stocks Comparison Center.
