PayPal Holdings Inc. (PYPL) remains an overlooked global payments leader with a cash machine core business funding aggressive buybacks and a long list of growth catalysts hiding in plain sight. In just his second quarter in the driver’s seat, CEO Enrique Lores delivered on his promises, writes Tom Hayes, editor of HedgeFundTips.
Management entered the second quarter guiding to a high-single-digit decline in earnings and an approximate 3% decline in transaction margin dollars. Instead, PayPal delivered adjusted earnings per share of $1.38, down just 1% year-over-year and well ahead of the $1.28 consensus. Transaction margin dollars reached $3.9 billion, growing 1% YOY.
(Editor’s Note: Tom is speaking at our 2026 MoneyShow Masters Symposium San Francisco, scheduled for Aug. 25-28. Click HERE to register.)
PayPal Holdings Inc. (PYPL)
In fact, PayPal’s embrace of the “low expectations = secret to happiness” framework set the stage for a clean beat across the board. Revenue of $8.6 billion topped expectations by about $213 million. Total payment volume reached a record $486.4 billion, beating estimates by $13 billion – while accelerating on an adjusted basis for a second consecutive quarter.
Venmo marked its seventh straight quarter of double-digit growth. Braintree grew at a mid-teens rate for a ninth consecutive quarter of profitable growth. BNPL volume accelerated three points to +26%. And branded checkout, the centerpiece of the bear case, continued to stabilize for a second consecutive quarter (despite expectations for further deterioration).
Yet the most important number this quarter wasn’t in the earnings release or the raised full-year outlook. It was $60.50.
Earlier this month, Stripe and private equity firm Advent made a joint offer to acquire PayPal for $60.50 per share, valuing the company at $53.4 billion. We quickly came out publicly on the proposal, calling it an insulting offer that would steal material upside from existing owners. The board delivered the understatement of the year by calling it “inadequate,” leaving it at that.
