PayPal’s PYPL portfolio strength has been helping it maintain deep and trusted relationships with merchants and consumers. Its two-sided platform helps develop direct financial relationships with customers and merchants. PYPL’s investments in improving branded checkout, person-to-person (P2P) and Venmo helped in driving total active accounts, which increased 2% year over year to 434 million in 2024. 

Monthly active accounts climbed 2% year over year to 223 million. The number of payment transactions increased 5% year over year to 26.33 million. Transactions per active account (TPA) inched up 3% year over year to 60.6 million. Excluding PSP (unbranded card processing), TPA increased 4% year over year to 34.9 million in 2024.

Expanding clientele benefited total payment volume (TPV), which increased 10% year over year to $1.68 trillion in 2024. Transaction margin in dollar terms increased 7% year over year while Buy-Now-Pay-Later TPV grew 21% year over year to $33 billion. Strong adoption of Fastlane is expected to boost future volumes as PYPL ink deals with NBCUniversal, Roku and StockX.

PYPL’s Strong Portfolio to Aid Prospects

PayPal shares have returned 35% in the trailing 12-month period, outperforming the Zacks Computer and Technology sector’s return of 25.6%.

PYPL Stock’s Performance

Image Source: Zacks Investment Research

A strong portfolio is a growth driver for PYPL. The unveiling of Fastlane, which enhances the guest checkout experience by allowing users to complete their purchase in one click, remains noteworthy. Since its August launch, more than 2,000 merchants have been using Fastlane to provide a seamless experience to their customers and drive increased conversion.

PayPal’s partnership with Adyen, Global Payments and Pfizer is expected to attract more merchants to Fastlane. The solution is not only improving conversion for PayPal’s merchants but also making more shoppers familiar to PayPal. Roughly 75% of Fastlane consumers are new or dormant PayPal users while 25% of Fastlane users never had a PayPal account.

PayPal is expanding value-added services to boost the merchant experience. In the fourth quarter of 2024, PYPL launched FX-as-a-service, which is an automated currency conversion, and the platform is already live on Meta Platforms META. PYPL’s network tokens for automated billing capabilities are live with merchants, including Instacart, Mint Mobile and Poshmark. Expanding value-added services is expected to drive transaction margin in dollar terms.

PayPal Everywhere, which was launched in September, is driving significant increases in debit card adoption and opening new categories of spend. In the fourth quarter of 2024, PYPL added more than 1.5 million first-time PayPal debit card users and debit card TPV was up nearly 100%, with the most active reward categories being gas, groceries and restaurants. 

Venmo’s user base grew 4% year over year in the fourth quarter of 2024, reaching more than 64 million monthly active accounts. Monetized Venmo monthly active accounts beyond P2P and instant transfers grew more than 20% in the fourth quarter, driven by the adoption of Venmo debit cards and Pay with Venmo. Venmo debit card monthly actives grew more than 30%, and Pay with Venmo monthly actives grew more than 20%.

Expanding Partner Base Aids PYPL’s Prospects

PayPal’s expanding partner base, including Fiserv, Adyen, Amazon AMZN, Global Payments and Shopify SHOP, is driving prospects. 

PayPal is now an additional processor for Shopify Payments in the United States. Its branded checkout solutions are now integrated into Shopify Payments. This creates a single and unified experience for business owners to drive operational efficiency. PayPal’s partnership with Amazon now brings PayPal Checkout to SMBs offering Buy with Prime. Its collaboration with Apple and Google to integrate the Venmo debit card with Apple Pay and Google Pay has been a noteworthy development. 

PayPal is a top payment method for advertisers and consumers globally across Meta Platforms’ family of apps. Creators and developers are using Hyperwallet. META also uses Braintree for credit card processing.

PYPL’s Earnings Estimate Revisions Show Upward Trend

The Zacks Consensus Estimate for 2025 earnings is pegged at $5.02 per share, up by 2.44% over the past 30 days, suggesting 7.96% growth over 2024. 

The consensus mark for 2025 revenues is currently pegged at $33.01 billion, indicating 3.81% growth over 2024.

PYPL’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 14.26%.
 

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

PayPal Shares Trade at a Discount

PYPL is one of the cheaper stocks in the industry, as suggested by the Value Score of B.

PYPL stock is trading at a significant discount with a forward 12-month P/E of 15.28X compared with the sector’s 27.24X.

PYPL’s P/E Ratio (F12M)

Image Source: Zacks Investment Research

PayPal shares are trading below the 200-day moving average, indicating a bullish trend.

PYPL Shares Trade Above 200-Day SMA

Image Source: Zacks Investment Research

Conclusion

PayPal’s robust portfolio, expanding partner base and cheap valuation are key drivers that make the stock attractive to long-term investors. 

PayPal currently has a Zacks Rank #2 (Buy) and a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report

PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report

Shopify Inc. (SHOP) : Free Stock Analysis Report

Meta Platforms, Inc. (META) : Free Stock Analysis Report

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