PayPal's stock has plummeted to 83% below its record high of $305.13, set in July 2021. Despite growing payment volume, revenue, and free cash flow over the past five years, the company's branded checkout solution has been a weak spot.
The total payment volume rose 56% from Q2 2021 to Q2 2026, driving revenue 40% higher during that time. Free cash flow grew by 64%, but these growth rates are not spectacular. The branded checkout solution, which was once PayPal's crown jewel, has only grown 2% in the first and second quarters.
The competitive landscape is intense, with Apple Pay being a significant threat due to its embedded presence in popular hardware devices. This could suggest that PayPal's user base is more economically sensitive, making it vulnerable to macroeconomic headwinds.