PayPal Holdings, Inc. (NASDAQ:PYPL) shares are trading lower on Wednesday as investors weighed concerns over slowing core growth and a lack of stronger turnaround signals despite the company’s recent earnings beat.

On Tuesday, the parent of Venmo posted first-quarter revenue of $8.353 billion, up 7% from a year earlier and above analysts’ estimate of $8.046 billion. Adjusted earnings were $1.34 per share, beating the consensus estimate of $1.27.

Analyst’s Take

Bank of America Securities analyst Matthew C. O’Neill reiterated a Neutral rating on PayPal, lowering the price forecast from $55 to $53.

According to the analyst, PayPal’s earnings beat was partly supported by share repurchases rather than stronger operating performance.

The analyst says investors are still unconvinced by the company’s turnaround efforts under new leadership.

While management is making gradual improvements, the latest earnings call did not provide enough proof of consistent execution or stable growth.

Investors were hoping for stronger, more decisive actions, especially since patience with the company is already wearing thin.

He noted that weak second-quarter guidance and unchanged fiscal 2026 outlook disappointed investors seeking clearer turnaround signals.

While the management outlined more than $1.5 billion in cost savings over the next several years, the analyst added that most savings would fund reinvestment efforts instead of boosting near-term earnings growth.

He noted that branded checkout growth remained modest despite easier comparisons during the first quarter.

O’Neill said management expects branded checkout growth near the lower end of its long-term target range.

The analyst cited continued pressure on transaction margins and near-term expenses despite ongoing capital return efforts.

O’Neill added that investors remain focused on evidence of sustained execution and improving growth trends.

The analyst raised 2026 earnings per share from $5.31 to $5.35, and raised 2027 estimates from $5.46 earnings per share to $5.76 per share.

PayPal Price Action

PYPL Price Action: PayPal Holdings shares were down 0.73% at $46.57 at the time of publication on Wednesday, according to Benzinga Pro data.

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