PayPal PYPL shares have returned 39.8%, outperforming the Zacks Computer and Technology sector’s return of 30.6% and the Zacks Internet Software industry’s appreciation of 31.7%.

PYPL’s portfolio strength has been helping it maintain deep and trusted relationships with merchants and consumers. Its two-sided platform helps develop direct financial relationships with customers and merchants.

Expanding clientele benefited total payment volume, which increased 9% year over year, both on a spot-rate basis and forex-neutral basis, to $422.641 billion in the third quarter of 2024.

One Year Performance

PayPal saw year-over-year growth of 1% in total active accounts to 432 million, while payment transactions per active account were 61.4 million, up 9% year over year.

Transaction margin of $3.7 billion grew more than 8% on a reported basis and more than 6% ex-interest on customer balances, driven by higher interest income, branded checkout, Venmo, Braintree, and tech-led risk/loss improvements.

PYPL saw a 15% to 20% increase in Buy Now, Pay Later use in the reported quarter.

PayPal Shares Trade at a Discount

PYPL is one of the cheaper stocks in the industry, as suggested by the Value Score of B.

PYPL stock is trading at a significant discount with a forward 12-month P/E of 17.77X compared with the industry’s 35.24X.

PYPL’s P/E Ratio (F12M)

PayPal shares are trading above the 50-day and 200-day moving averages, indicating a bullish trend.

PYPL Shares Trade Above 50-Day & 200-Day SMA

PYPL Stock Rides on Strong Portfolio

A strong portfolio is a growth driver for PYPL. The unveiling of Fastlane, which enhances the guest checkout experience by allowing users to complete their purchase in one click, remains noteworthy. Since its August launch, more than 1,000 merchants have been using Fastlane to provide a seamless experience to their customers and drive increased conversion.

Currently, it is available in the United States. Fastlane is based on the company's decades of payment expertise to innovate and accelerate the guest checkout experience.

The launch of PayPal Complete Payments in new geographies, including China and Hong Kong, expands its footprint among small and medium-sized businesses (SMBs). PayPal expects to expand its service to more markets in 2025.

Expanding Partner Base Aids PYPL’s Prospects

PayPal’s expanding partner base, including Fiserv, Adyen, Amazon AMZN, Global Payments and Shopify SHOP, is driving prospects. The rich partner base is expected to help increase the adoption of PYPL’s Fastlane.

PayPal is now an additional processor for Shopify Payments in the United States. Its branded checkout solutions are now integrated into Shopify Payments. This creates a single and unified experience for business owners to drive operational efficiency.

PayPal’s partnership with Amazon now brings PayPal Checkout to SMBs offering Buy with Prime. In 2025, it will give Prime members the option to link their Amazon and PayPal accounts so that consumers can receive Prime shipping benefits when they use PayPal while shopping with Buy with Prime.

Its collaboration with Apple and Google to integrate the Venmo debit card with Apple Pay and Google Pay has been a noteworthy development.

PayPal is a top payment method for advertisers and consumers globally across Meta Platforms ’ META family of apps. Creators and developers are using Hyperwallet. META also uses Braintree for credit card processing.