PayPal (PYPL, Financial) just dropped a solid Q4 earnings beat, reporting adjusted EPS of $1.19 versus Wall Street's $1.12 estimate, and revenue of $8.37 billion, topping projections. The company also raised guidance, forecasting 2025 earnings between $4.95 and $5.10 per share—above the $4.90 consensus. Venmo's total payment volume jumped 10% year-over-year, and branded checkout volume saw a 6% lift. To sweeten the deal, PayPal announced a massive $15 billion share buyback, planning to repurchase $6 billion worth of stock this year.
But despite the strong numbers, investors weren't feeling it. Shares plunged 10.6% as of 12.17pm today , as analysts pointed to concerns over branded total payment volume growth missing targets. J.P. Morgan and Mizuho analysts suggested the sell-off was likely due to profit-taking after a 12% rally since last quarter's report. Others flagged ongoing questions about PayPal's checkout experience and whether it can fend off competition from Apple Pay and Shopify's Shop Pay. Transaction margin dollars climbed 7% to $14.7 billion in 2024, but the big question is whether CEO Alex Chriss' strategy—doubling down on Venmo, Braintree, and merchant integrations—can keep that momentum rolling.
Looking ahead, PayPal is banking on transaction margin dollar growth of 4%-5% in 2025 while pushing deeper into merchant partnerships and rolling out value-added services like Fastlane. Venmo's debit card and Pay With Venmo features are gaining traction, but PayPal still has to prove it can scale adoption fast enough. With fintech competition heating up, the company's ability to drive engagement and profitability in its core segments will determine whether this post-earnings dip is just a bump in the road or a red flag for what's ahead.
