PayPal Holdings: Hold Rating Maintained Amid Competitive Challenges and Valuation Constraints

William Blair analyst Andrew Jeffrey has maintained their neutral stance on PYPL stock, giving a Hold rating today.

Andrew Jeffrey has given his Hold rating due to a combination of factors affecting PayPal Holdings. One of the primary reasons is the company’s constrained valuation, which is limited by a lack of improvement levers for return on invested capital (ROIC). Despite some positive indicators, such as growth in Venmo and Buy Now, Pay Later (BNPL) volumes, PayPal faces significant competitive challenges in the digital wallet space, which hampers its ability to accelerate branded volume and transaction growth.
Furthermore, while PayPal has shown better-than-expected operating leverage and free cash flow, the long-term trade-off between Braintree’s market share and margin is seen as a limiting factor for the company’s total addressable market (TAM) and valuation. The 2025 guidance suggests limited potential for a turnaround, with transaction dollar growth decelerating and earnings per share (EPS) aligning with market expectations despite some first-quarter upside. These elements contribute to the cautious stance of maintaining a Hold rating.

Based on the recent corporate insider activity of 34 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PYPL in relation to earlier this year.