PayPal stock trades at a trailing P/E of 10.19 and a forward P/E of just 9.73, despite a Q2 2026 earnings beat and raised full-year guidance. That low multiple isn’t really about the business — it’s the aftermath of a collapsed buyout. Stripe and private equity firm Advent International offered $60.50 a share, valuing PayPal at roughly $53 billion, before talks fell apart in late August. The stock lost more than 12% in the days that followed. The real question isn’t whether PayPal’s business broke down — it’s whether the current price reflects a value opportunity now that acquisition speculation has cleared out, or whether the market is right to stay skeptical. This piece checks that question against PayPal’s actual Q2 results and its newer growth bets in stablecoins and agentic commerce.
What the collapsed buyout left behind
The Stripe-Advent consortium submitted a formal offer on July 15 at $60.50 per share (about $53 billion total), backed by roughly $50 billion in committed financing from JPMorgan and Morgan Stanley. PayPal’s board rejected it as inadequate, reportedly holding out for something closer to $70 a share. Reports through mid-August suggested talks were continuing at a higher price, but the pursuit was formally abandoned on August 27.
The deal broke down over a disagreement about why PayPal’s stock had been rising. Stripe attributed the gains to acquisition speculation — meaning the “real” value was lower. PayPal credited its own operational turnaround, meaning the stock deserved to keep trading higher regardless of a deal. Neither side could agree on what the stock was actually worth without the buyout premium attached. Shares fell 12% on the day the deal collapsed and kept sliding afterward, closing at $53.81 on September 15 — well below even the $60.59 peak reached during negotiations.
Q2 earnings themselves weren’t bad
PayPal’s Q2 2026 revenue came in at $8.68 billion, up 5% year over year and ahead of the roughly $8.47 billion analysts expected. Adjusted EPS of $1.38 beat estimates of $1.28 by a wide margin. GAAP net income was $1.1 billion, or $1.25 per diluted share. Total payment volume on a currency-neutral basis reached $486.4 billion, up 9%. Transaction margin dollars — the core profitability measure after subtracting transaction-related costs from revenue — grew 1% to $3.9 billion, or 3% excluding interest earned on customer balances. Non-GAAP operating margin came in at 17.4%, down 248 basis points year over year, a signal that cost pressure is building even as revenue grows.
The most notable detail was that online branded checkout volume — the “Pay with PayPal” button at online checkout — grew 2% on a currency-neutral basis for a second consecutive quarter. That matters because branded checkout share loss had been PayPal’s clearest weak spot for several quarters; this marks the growth stabilizing rather than eroding further. Management credited the improvement to Buy Now, Pay Later offerings and deeper Pay with Venmo integration. On the back of these results, PayPal raised its full-year adjusted EPS guidance to $5.38. Even so, the stock fell nearly 2% immediately after the report, as concerns about margin compression and rising competitive intensity outweighed the headline beat.
Can stablecoins and agentic commerce lift PayPal stock further
PayPal’s own stablecoin — a cryptocurrency designed to hold a steady value pegged to a currency like the dollar, used mainly for payments and transfers — is called PYUSD. Its market cap reached $4.5 billion by April 2026, up roughly 680% year over year, making it the fourth-largest stablecoin by that measure. PayPal’s edge here isn’t new technology; it’s distribution it already owns. With 400 million active accounts, 35 million merchants, and $1.2 trillion in annual payment volume, PayPal doesn’t need to build a user base from scratch the way most crypto-native stablecoin issuers do. Merchants also have a clear incentive: network fees around 0.5% versus roughly 2.9% for card processing.
On top of that, PayPal partnered with OpenAI in October 2025 to power “instant checkout” inside ChatGPT, part of a broader push into agentic commerce — a model where an AI agent, not a human, completes the purchase and payment on a user’s behalf during a conversation. PYUSD is positioned as the settlement layer underneath these AI-driven transactions. Neither business line moves PayPal’s overall revenue much yet, but the open question is whether they can eventually offset the years-long stagnation in branded checkout growth.
Is PayPal stock actually cheap right now
At the September 15 close of $53.81, PayPal’s market cap stands at $46.03 billion, with a forward P/E of 9.73. Against a 52-week range of $38.46 to $79.22, the current price still sits closer to the low end. The average analyst price target of $57.07 implies roughly 6% upside, but the consensus rating remains “Hold” — a sign Wall Street isn’t fully convinced either. Despite genuinely improving fundamentals, the multiple stays compressed largely because of what management itself acknowledged: “greater competitive intensity” in branded checkout from Apple Pay, Shopify’s Shop Pay, and Stripe’s Link. The market’s skepticism about PayPal stock is about the durability of its core business, not this quarter’s numbers.
What to watch next
The first thing to track is whether branded checkout growth holds near 2% into Q3 — management expects a similar trend, but guided adjusted EPS to decline by a low-single-digit percentage versus last year’s $1.34, so it’s too early to call this a clean growth-and-margin story. Second, watch whether PYUSD’s circulating supply keeps expanding and whether the OpenAI agentic commerce partnership starts showing up in actual transaction volume. Third, PayPal spent $3.05 billion on buybacks in the first half of 2026 alone, so the pace of that capital return is worth tracking too. The full Q2 results are available in PayPal’s official press release.