Should You Invest $1,000 in PayPal (PYPL) Right Now?

PayPal (NASDAQ: PYPL), one of the world's largest digital payment companies, was once a popular growth stock. But if you had invested $1,000 in PayPal when it reached its record high on July 23, 2021, your investment would only be worth $187 today. Let's see why its stock has plummeted over the past five years and whether it's worth a fresh $1,000 investment today.

Image source: PayPal.

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What happened to PayPal?

PayPal hosted 439 million active accounts in the second quarter of 2026, but that was just 0.3% growth from a year earlier. Since the end of 2022, it's only gained 4 million new accounts.

PayPal is struggling to gain new users due to intense competition from other digital payment platforms. To offset that pressure, it's relying more heavily on its unbranded payment processing platform, Braintree, and its peer-to-peer payments platform, Venmo.

However, those platforms generate lower take rates (the percentage of each transaction retained as revenue) than its namesake services. As a result, PayPal's transaction take rate has declined every year since its spin-off from eBay (NASDAQ: EBAY) in 2015. eBay's decision to replace PayPal with Adyen (OTC: ADYEY) as its preferred payment provider, implemented in stages from 2018 to 2023, made it even harder for PayPal to acquire new accounts.

PayPal's revenue rose 8% in 2023, 7% in 2024, and 4% in 2025. That deceleration indicated its high-growth days were over, so it focused on cutting costs to stabilize its margins and buying back more shares to boost its EPS. Instead of aggressively pursuing new accounts, PayPal rolled out additional features to increase its total transactions and revenue per existing user.

Is PayPal a worthwhile investment today?

At its peak, PayPal's stock traded at 87 times the $3.52 in EPS it would generate in 2021. Today, it trades at just 11 times this year's EPS -- even though its business is gradually stabilizing.

From 2025 to 2028, analysts expect PayPal's revenue and EPS to grow at CAGRs of 5% and 4%, respectively, as it deepens its partnerships with credit card companies, rolls out new services for brick-and-mortar businesses, expands Venmo's reach, and diversifies its platform with more crypto trading tools, high-yield savings accounts, and stablecoin-powered transfers.

PayPal isn't down for the count yet, and its low multiple should limit its downside potential. Therefore, it should be a safe place to park a fresh $1,000 investment -- but I wouldn't touch it unless it raises its paltry forward dividend yield of 1%. As a cheap, high-yielding dividend stock, PayPal might attract more investors willing to overlook its other glaring weaknesses.

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.