Is PayPal Stock a Buy, Sell, or Hold at 80% Below Its Record High?

PayPal (NASDAQ: PYPL), one of the world's largest digital payment companies, was once a promising growth stock. It closed at an all-time high of $305.13 on July 23, 2021, marking a 651% gain from its opening price of $40.60 following its spin-off from eBay (NASDAQ: EBAY) on July 20, 2015. But today, it trades at about $52.

Should you buy, sell, or hold PayPal's stock after that 80% decline? Let's review its challenges, potential catalysts, and valuations to decide.

Image source: PayPal.

Why are PayPal's high-growth days over?

PayPal's troubles started in 2018, when eBay announced it would gradually switch to Adyen (OTC: ADYEY) as its preferred payment provider by 2023. Its growth during the pandemic temporarily offset that pressure, but it lost its momentum as those tailwinds dissipated.

Over the following years, PayPal faced tougher competition from other digital payment platforms. It relied more heavily on its unbranded payment-processing platform, Braintree, and its peer-to-peer payments platform, Venmo, to offset the slowdown. Unfortunately, Braintree and Venmo generated lower margins and take rates than PayPal's branded checkout services.

As a result, PayPal's transaction take rate fell from 2.89% in 2015 to 1.66% in 2025, and slipped to 1.62% and 1.61% in the first and second quarters of 2026, respectively. As PayPal's take rates declined, it struggled to gain new customers. From 2022 to 2025, its total active accounts only grew from 435 million to 439 million. That figure stayed flat in the first half of 2026.

Can PayPal stabilize its business?

Instead of aggressively trying to gain new users, PayPal is rolling out more features to boost its total transactions (and revenue) per user. These initiatives include deeper partnerships with credit card companies, new products for brick-and-mortar stores, the expansion of Venmo's merchant base, and the rollout of more crypto trading tools, high-yield savings accounts, and stablecoin-driven cross-border transfers for its namesake platform. It's also unifying its payment, financial services, and risk management tools on its PayPal Open platform.

PayPal is also cutting costs and spending billions on buybacks to boost its EPS. However, it expects its adjusted EPS to rise by only 1% for the full year. Its stock looks cheap at less than 10 times that estimate, but it could struggle to command a higher valuation in this tough market. It also probably won't attract much takeover interest after rejecting a $53 billion takeover bid (at $60.50 per share) from a consortium led by Stripe and Advent International earlier this year.

PayPal's downside might be limited at these levels, but it will struggle to keep pace with the market as long as its account growth remains flat and its take rates continue to shrink. Therefore, it makes more sense to sell or avoid PayPal than to buy and hold it right now.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adyen, PayPal, and eBay. The Motley Fool recommends the following options: short December 2026 $62.50 calls on PayPal. The Motley Fool has a disclosure policy.