Analysts downgrade PayPal as branded checkout trends worsen

Investing.com -- PayPal faced a number of downgrades after its post-earnings selloff, with several analysts citing accelerating share losses in branded checkout and rising uncertainty over the company’s turnaround efforts.

PayPal shares plunged 20% in Tuesday’s session following the report.

Canaccord analyst Joseph Vafi cut his rating to Hold, arguing that PayPal’s core e-commerce proposition is losing relevance as competition intensifies.

Vafi said “the checkout with PayPal button is under pressure” as e-commerce consolidates around platforms that do not offer PayPal and as Apple Pay and Google Pay streamline transactions.

He added that “PayPal really needs a next chapter and solely doubling down on eCommerce one more time seems like pouring hot water through the same coffee grounds again.” Vafi pointed to BNPL as a bright spot but said broader growth drivers such as Venmo and agentic commerce remain too small to offset structural headwinds.

HSBC analyst Saul Martinez also downgraded the stock to Hold, citing lower confidence in PayPal’s ability to stabilize branded checkout volumes.

Martinez noted that the company reported “a sharp deceleration in branded checkout volumes in Q4 2025” and warned that triggering “greater consumer and merchant engagement will not be easy and, at minimum, will take time.”

He reduced his earnings and free cash flow estimates and lowered his target price to $47.

Citizens analyst Andrew Boone likewise cut his rating to Market Perform after branded checkout growth slowed to 1% year over year.

Boone said results suggest PayPal “is losing share” and flagged rising competitive risks from agentic commerce, concluding that “the competitive nature of payments now appears more intense than we realized.”

You May Also Be Interested In

• Walmart (WMT) PT Lowered to $130 at UBS on Investment Narrative's Competing Dynamics
• NVIDIA (NVDA) 10K contracts of September 125 puts trade
• Modine shares rise after bullish Hunterbrook report