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PayPal Deal Buzz: Can New Owners Fix Profitability Pressure?
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Key Takeaways
PYPL reportedly received a $53B takeover offer from Stripe and Advent at $60.50 per share.
PYPL's Q1 revenues and payment volume grew, but operating income and net income declined.
PYPL expects a tougher second quarter with slower revenue growth and a high-single-digit EPS decline.
PayPal Holdings, Inc. (PYPL - Free Report) reportedly received a takeover offer worth more than $53 billion from Stripe and private equity firm, Advent International, according to a Reuters report. The proposed price is $60.50 a share, about 28% above PayPal’s closing share price on Tuesday. The offer, submitted earlier this month, is backed by roughly $50 billion of committed bank financing.
Under the proposal, Stripe and Advent would own equal stakes in PayPal rather than split the company. PayPal has not responded, and there is no certainty that the talks will result in a transaction. The bidders reportedly want discussions to move forward in the coming weeks after an initial approach in April, according to that report citing sources.
PayPal reported mixed first-quarter 2026 results. Revenues rose 7% to $8.35 billion, while total payment volume increased 11% to $464 billion. Payment transactions grew 7% to 6.48 billion, and active accounts increased 1% to 439 million.
However, profitability remained under pressure. Non-GAAP operating income fell 5% to $1.54 billion, and non-GAAP net income dropped 7% to $1.23 billion. The non-GAAP operating margin narrowed 229 basis points to 18.4%, while non-GAAP earnings per share (EPS) edged up 1% to $1.34.
The second quarter of 2026 is expected to be more challenging. PayPal expects low-single-digit currency-neutral revenue growth, a low-single-digit decline in transaction margin dollars and a high-single-digit fall in non-GAAP EPS.
How Are Visa & Mastercard Restructuring?
Visa (V - Free Report) expanded in Argentina by completing its acquisition of Prisma Medios de Pago and Newpay in February 2026. The businesses add issuer processing, real-time payments, the Banelco ATM network and bill-payment services, broadening Visa beyond international card networking into domestic financial technology. The transaction added two established Argentine payments platforms to Visa’s portfolio.
Mastercard (MA - Free Report) agreed to acquire stablecoin infrastructure company, BVNK, in March 2026. MA valued the proposed acquisition at up to $1.8 billion, including $300 million in contingent consideration. BVNK connects traditional currencies with stablecoins, tokenized deposits and blockchain payment rails, helping Mastercard support faster, programmable value transfers worldwide.
PYPL’s Price Performance, Valuation & Estimates
Shares of PayPal have gained 14.4% in the past three months compared with the broader industry and the S&P 500 Index rise.
Image Source: Zacks Investment Research
From a valuation standpoint, PayPal’s shares are trading cheaply, as suggested by the Value Score of A. In terms of forward 12-month P/E, PYPL stock is trading at 10.00X, which is at a significant discount to the Zacks Financial Transaction Services industry’s 17.12X.
Image Source: Zacks Investment Research
PayPal’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised upward to $5.32 in the past month. The consensus estimate for the metric indicates a year-over-year increase of 0.19%.
View the Zacks #1 Rank List
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PayPal Deal Buzz: Can New Owners Fix Profitability Pressure?
Key Takeaways
PayPal Holdings, Inc. (PYPL - Free Report) reportedly received a takeover offer worth more than $53 billion from Stripe and private equity firm, Advent International, according to a Reuters report. The proposed price is $60.50 a share, about 28% above PayPal’s closing share price on Tuesday. The offer, submitted earlier this month, is backed by roughly $50 billion of committed bank financing.
Under the proposal, Stripe and Advent would own equal stakes in PayPal rather than split the company. PayPal has not responded, and there is no certainty that the talks will result in a transaction. The bidders reportedly want discussions to move forward in the coming weeks after an initial approach in April, according to that report citing sources.
PayPal reported mixed first-quarter 2026 results. Revenues rose 7% to $8.35 billion, while total payment volume increased 11% to $464 billion. Payment transactions grew 7% to 6.48 billion, and active accounts increased 1% to 439 million.
However, profitability remained under pressure. Non-GAAP operating income fell 5% to $1.54 billion, and non-GAAP net income dropped 7% to $1.23 billion. The non-GAAP operating margin narrowed 229 basis points to 18.4%, while non-GAAP earnings per share (EPS) edged up 1% to $1.34.
The second quarter of 2026 is expected to be more challenging. PayPal expects low-single-digit currency-neutral revenue growth, a low-single-digit decline in transaction margin dollars and a high-single-digit fall in non-GAAP EPS.
How Are Visa & Mastercard Restructuring?
Visa (V - Free Report) expanded in Argentina by completing its acquisition of Prisma Medios de Pago and Newpay in February 2026. The businesses add issuer processing, real-time payments, the Banelco ATM network and bill-payment services, broadening Visa beyond international card networking into domestic financial technology. The transaction added two established Argentine payments platforms to Visa’s portfolio.
Mastercard (MA - Free Report) agreed to acquire stablecoin infrastructure company, BVNK, in March 2026. MA valued the proposed acquisition at up to $1.8 billion, including $300 million in contingent consideration. BVNK connects traditional currencies with stablecoins, tokenized deposits and blockchain payment rails, helping Mastercard support faster, programmable value transfers worldwide.
PYPL’s Price Performance, Valuation & Estimates
Shares of PayPal have gained 14.4% in the past three months compared with the broader industry and the S&P 500 Index rise.
Image Source: Zacks Investment Research
From a valuation standpoint, PayPal’s shares are trading cheaply, as suggested by the Value Score of A. In terms of forward 12-month P/E, PYPL stock is trading at 10.00X, which is at a significant discount to the Zacks Financial Transaction Services industry’s 17.12X.
Image Source: Zacks Investment Research
PayPal’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised upward to $5.32 in the past month. The consensus estimate for the metric indicates a year-over-year increase of 0.19%.
Image Source: Zacks Investment Research
PayPal currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.