Why PayPal (PYPL) Stock Is Sinking Today

PayPal (PYPL) is slumping 10% after the fintech firm reported stronger-than-expected fourth-quarter revenue and profit but a few of its other key Q4 metrics disappointed the Street.

A Look at PYPL’s Q4 Results and Its 2025 Guidance

The company’s Q4 earnings per share, excluding certain items, came in at $1.19, well above analysts’ average estimate of $1.12. Moreover, its Q4 revenue climbed 5% versus the same period a year earlier to $8.37 billion, above analysts’ average estimate of $8.28 billion.

A consumer in a cafe paying for goods using a mobile payment app.

But the company’s revenue from branded payments increased a lower-than-expected 6% year-over-year, while its adjusted operating margin fell 0.34 percentage points YOY to 18% and the number of payment transactions dropped 3% YOY.

On a positive note, the company predicts that it will generate 2025 earnings per share, excluding certain items, of $4.95-$5.10, above Wall Street analysts’ mean estimate of $4.90.

PayPal’s Comments 

“I’m proud that we’ve laid a strong foundation for long-term, profitable growth across the company’s most important areas. The improvements we made to branded checkout, peer-to-peer, and Venmo, plus the progress we made on our price-to-value strategy, are beginning to show up in our results.” CEO Alex Chriss said in a statement.

The Recent Price Action of PYPL Stock

In the last month, PYPL has slid 8%, while it has risen 2% in the last three months.

While we acknowledge the potential of PYPL, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PYPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.