PayPal Grows Its Volume Every Year. Here's Why the Stock Doesn't Always Follow.

At a precocious level, PayPal (NASDAQ: PYPL) has the characteristics of a palmy business. Its 228 cardinal monthly progressive users dwell of merchants and individuals, supporting a planetary web effect. Analysts expect it volition make $6 cardinal successful escaped currency travel successful 2026 connected $34.7 cardinal successful revenue. And the institution is simply a starring unit successful integer payments, having been successful concern for much than 2 decades.

Perhaps nary metric demonstrates its occurrence much than full outgo measurement (TPV), which roseate 10% twelvemonth implicit twelvemonth successful Q2 (ended June 30) to $486 billion. This cardinal fig keeps rising each year.

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But the fintech banal remains a wildly disappointing investment. It's trading down 81% from its 2021 highest (as of Aug. 12). Here's what mightiness beryllium causing this losing streak.

Branded checkout weakness

During the 2nd quarter, TPV astatine Venmo surged 14% twelvemonth implicit year. The outgo work supplier line, with publication from Braintree, saw TPV turn 13%. However, PayPal's wide gross was lone up 5%.

Investor attraction should crook to the company's online branded checkout solution. This includes PayPal-branded checkout, Pay with Venmo, and eBay. It has been the astir lucrative conception successful the past.

Its show has been subpar, peculiarly aft the 2018-2021 period, erstwhile it registered 26% annualized TPV growth. TPV roseate by conscionable 5% successful 2022. That weakness hasn't improved, arsenic branded checkout TPV climbed 2% successful the 2nd quarter, accounting for 28% of PayPal's full TPV.

Branded online checkout is PayPal's crown jewel. When consumers are acceptable to wage astatine an online merchant, a dedicated PayPal fastener allows them to wage seamlessly without entering outgo details oregon a shipping address.

It's the astir profitable portion of the business. Therefore, its show impacts PayPal's financials. Transaction borderline dollars accrued by conscionable 1% past quarter, a complaint that should beryllium higher if branded checkout were doing better.

Competition is playing a portion

Management is striking an upbeat tone. "We're besides raising our anticipation for online branded checkout to the low-single-digit scope for the year," CEO Enrique Lores said connected the Q2 2026 net call. I don't judge this inactive muted gait of maturation volition propel the stock price.

PayPal's banal has traded astatine a beaten-down valuation for immoderate time. The marketplace isn't bullish, though. Competition successful the integer payments scenery is intense, particularly from the likes of Apple Pay, which has an estimated 900 cardinal planetary users.