PayPal Stock Surged 18% on a $53 Billion Takeover Bid. Here’s What’s Next

Key Stats for PYPL Stock

• Past week’s performance: 22.1%
• 52-week range: $38 to $80
• Valuation model target price: $66
• Implied upside: 46.7% over 2.5 years

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PayPal’s Turnaround Story Just Became a Takeover Story

PayPal (PYPL) jumped more than 22% this week after Reuters reported that rival Stripe and private equity firm Advent International had offered $60.50 per share, valuing the company at roughly $53 billion. That is a 28% premium to where shares traded before the news broke, and it instantly became the biggest catalyst PayPal has seen all year.

PayPal’s board has not formally responded, but sources say its early view is that the offer looks inadequate. Management believes the price does not fully reflect the value it can create by finishing its ongoing turnaround. The board is also weighing financing certainty and regulatory risk, since combining two of the largest online payment platforms would draw serious antitrust scrutiny.

The financing looks real. JPMorgan and Morgan Stanley have lined up roughly $50 billion in debt financing, and Stripe and Advent are each contributing about $17 billion in equity. Wolfe Research has said it expects the consortium to come back with a higher offer.

This deal speculation now sits on top of the turnaround Enrique Lores has been running since he became CEO earlier this year, reorganizing the company around checkout, Venmo, and payment services. If PYPL stock keeps trading below the $60.50 offer price, it signals the market thinks a higher bid or a walk-away is still possible.

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Is PYPL Stock Undervalued?

Under valuation model assumptions realized through 12/31/28, the stock is modeled using:

• Revenue growth (CAGR): 4.0%
• Operating margins: 16.6%
• Exit P/E multiple: 8.3x

Based on these inputs, the model estimates a target price of $66, implying 46.7% total upside and a 16.7% annualized return over the next 2.5 years.

PayPal still trades like a company investors have given up on, even though the underlying numbers tell a steadier story. Shares sit at roughly 8 times forward earnings, a fraction of what payment networks and even some fintech peers command. That gap exists because the market wants proof the turnaround sticks before it pays up.

Checkout execution is the swing factor. PayPal’s branded checkout has lost share to newer options like Apple Pay and buy now, pay later apps, and Lores has called fixing that his top priority. Meanwhile, Venmo, once treated as a side project, is now being built into a standalone growth engine with its own strategy around lending and savings features.

Compared with Block, whose Cash App and Square ecosystem carry similar consumer fintech risk, PayPal’s scale and profitability look more durable. Against network giants like Visa, PayPal trades at a steep discount because it carries direct merchant and credit exposure that a pure network does not.

An annualized return north of 15% typically signals a stock that the market has priced too pessimistically. PayPal’s setup fits that pattern, assuming management can turn its reorganization into visible checkout share gains.

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PayPal Versus Its Payments Peers

PayPal trades at roughly 8 times forward earnings, a steep discount to nearly every peer in its space. Block (XYZ), owner of Cash App and Square, posted Q1 gross profit growth of 27% and adjusted EPS growth of 52%, and it still trades around 45 times trailing earnings, more than five times PayPal’s multiple, because investors are paying up for Cash App’s faster growth even though Block’s overall revenue growth sits in the low single digits.

Mastercard (MA) offers the clearest network comparison. It trades near 24 times forward earnings, roughly triple PayPal’s multiple, after posting 16% reported revenue growth and 23% adjusted EPS growth last quarter. That gap exists because Mastercard collects a fee on every transaction without taking on credit or fraud exposure, while PayPal carries both. Visa, covered elsewhere in this batch, trades at a similar premium to Mastercard for the same reason.

PayPal’s own numbers, 7% revenue growth and a mid-teens operating margin, look modest next to Block’s gross profit growth or Mastercard’s EPS growth. But the valuation gap looks wide enough that even incremental progress on checkout share could close some of that distance, which is exactly what the market will be watching for when PayPal reports second-quarter results.

Find out what needs to happen for PayPal’s 2028 upside case to play out >>>

What’s Driving PYPL Stock Going Forward?

The next real catalyst arrives July 28, when PayPal reports second-quarter results and gives the market its first extended look at how the reorganization is playing out. Management has guided full-year adjusted earnings per share between $5.35 and $5.39, and any signs of stabilizing checkout volume would support that outlook.

Venmo’s evolution into a standalone unit matters here too. Reports have suggested potential buyers have shown interest in parts of PayPal’s business, which adds a layer of speculation around what management ultimately decides to do with the unit. A clearer strategic path for Venmo, whether through partnerships or new monetization, could unlock value investors are not currently pricing in.

Partnerships with OpenAI, Google, and Perplexity around agentic commerce also point to a longer-term growth lever. PayPal is positioning itself as the payment layer for AI-driven shopping experiences, and if that trend accelerates, it could open a meaningful new revenue stream. Because these partnerships are still in an early stage, they represent optionality rather than a guaranteed outcome, but they add to the case for patience.

Regulatory developments in the UK and ongoing competitive pressure from Apple Pay and newer wallets remain the key risks to watch. Investors will be looking for evidence that checkout losses have stabilized before fully buying into the turnaround story.

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Should You Invest in PayPal?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up PYPL, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track PYPL alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!