SAN JOSE, California, August 29, 2026, 00:58 EDT.
- PayPal dropped 12.71% to finish at $53.66, with 36.21 million shares traded.
- Stripe and Advent withdrew from pursuing what had been reported as a $60.50-per-share bid.
- Revenue increased by 5% in the second quarter, while GAAP operating margin declined by 171 basis points.
- Analysts maintain a Hold rating, with the average price target at $56.16.
PayPal Holdings (NASDAQ: PYPL) fell $7.81 on Friday, wiping out the takeover premium linked to speculation about a $53 billion offer.
The stock closed 11.3% under the suggested $60.50 price. Compared to Friday’s close, the offer would mean a 12.7% gain.
A consortium led by Stripe and Advent has ended its pursuit of PayPal, Reuters said. The two sides were unable to agree on price, and regulatory hurdles added to the challenges.
The offer was 1.6% below Thursday’s closing price of $61.47. The difference indicated that traders anticipated either an improved bid or higher standalone value.
| Investor marker | Value | Reading |
|---|---|---|
| Friday closing price | $53.66 | Shares dropped 12.71% for the day |
| Disclosed offer | $60.50 | 12.7% higher than close |
| Consensus analyst price target | $56.16 | 4.7% above Friday’s close |
| FY2026 adjusted EPS outlook | About $5.38 | Implied price-to-earnings ratio of 10.0 |
With the valuation now corrected, operating execution remains the primary support. PayPal is priced at 10.85 times forward earnings, compared to an industry median close to 15, LSEG data reported by Reuters shows.
Revenue for the second quarter climbed 5% to $8.682 billion. Total payment volume advanced 10% to $486.4 billion, and active accounts inched up 0.3% to reach 439 million.
The strength of profit quality appeared weaker. GAAP operating margin decreased to 16.4% from 18.1%, while non-GAAP operating income was down 8%.
Cash generation was robust. Adjusted free cash flow totaled $1.832 billion, while PayPal bought back approximately 33 million shares for $1.5 billion.
Management increased its full-year adjusted EPS outlook to approximately $5.38. As a result, the company’s Friday closing price equates to about 10 times the projected figure.
Wall Street’s stance is wary. Analysts’ latest recommendations include five Buy, three Overweight, 34 Hold, one Underweight and four Sell ratings. The consensus price target stands at $56.16.
Multiple analysts reduced their price targets following the report. Mizuho lowered its target to $51 from $60, and Loop Capital adjusted its target to $50 from $62. Both firms maintained their neutral ratings.
Risks: PayPal continues to experience competition from Apple Pay and Shop Pay in branded checkout. A fresh bid may boost shares, though investors should not count on another attempt.
The next set of scheduled checkpoints is approaching. Investors recorded as shareholders on September 4 will be paid a $0.14 dividend on September 25. The following earnings announcement is anticipated on October 27.
