“Single-Digit Penetration”: PayPal Stock (NASDAQ::PYPL) Rallies as Venmo Fights Back

For payment processor stock PayPal (PYPL), its experience with Venmo has not been doing so well. In fact, reports suggest, there just are not a lot of people putting Venmo to work these days, especially in the face of several competitors. But PayPal is not out of the market just yet, and is planning to bring users to the table—or perhaps back to the table—with some new features. The move struck a chord with investors, who sent shares up nearly 2% in Wednesday afternoon’s trading.

PayPal wants to make Venmo more than just a peer-to-peer cash transfer service, and with good reason. The more use cases Venmo has, the more likely it is to find users in the first place. And with debit card penetration rates “…in the single digits” amid a slew of competitors, it needs users. And quickly.

There are new rewards programs for Venmo Debit Mastercard (MA) users, as well as new checkout options with retailers. It also has a new ad campaign going at selling Venmo to its over 64 million active users a month as a “full-service commerce platform.” And there are signs that this could work; Venmo posted a 20% gain in revenue on a year-over-year basis—PayPal would not provide dollar figures, though—and total payment volume at Venmo hit $75.9 billion.

Not All Went as Planned

But as is commonly the case in life, not everything went according to plan. In fact, PayPal just recently found that it would no longer be working with Google (GOOGL) Wallet. Google Wallet will no longer support PayPal starting June 13, 2025, and those who are currently using Google Wallet with PayPal will need to pivot to a different payment platform, be it debit card, credit card, or bank account.

In fact, reports noted, Google Wallet stopped letting users add a PayPal account to their Google Wallet account back in mid-April. This was somewhat unexpected, as PayPal had been supporting Google Wallet since 2017, reports noted. About the only word that reflected reasons came from a PayPal statement that declared “…PayPal is constantly evolving our offerings to deliver smart, flexible and more rewarding ways to pay.”

Is PayPal a Buy, Hold or Sell?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on PYPL stock based on 13 Buys, 16 Holds and three Sell recommendations assigned in the past three months, as indicated by the graphic below. After a 12.28% rally in its share price over the past year, the average PYPL price target of $79.93 per share implies 10.22% upside potential.

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