PayPal (PYPL) will announce its fourth-quarter 2025 earnings on Feb. 3, and the announcement comes at a time when investor sentiment around the stock remains cautious. While the company has continued to deliver profitable growth, drive monthly active customers, and increase engagement among existing users, its share price has been under pressure. Over the past three months, PYPL stock has fallen nearly 24%, significantly lagging the broader market and many of its peers.
The significant decline in PayPal’s stock reflects growing concern about competition in the digital payments industry. PayPal is no longer viewed as the uncontested leader it once was, as major players such as Apple Pay, Shop Pay, and Stripe Link have gained momentum. In addition, the rise of buy-now-pay-later providers has further fragmented the market, gradually eroding PayPal’s dominance.
The broader economic backdrop has also weighed on the stock. With ongoing macroeconomic uncertainty expected to hurt consumer spending, investors remain cautious.
Another key issue is profitability. PayPal has been investing to drive long-term growth, but those efforts may pressure near-term margins and limit bottom-line growth in the coming quarters. This has contributed to the stock’s recent struggles.
Now that the company is approaching its earnings release, historical trends suggest caution may be warranted. PayPal shares have declined after three of the past four quarterly reports, including a 4.6% drop following its third-quarter results.
Options market activity suggests that traders are expecting a post-earnings move of about 7.3% in either direction for contracts expiring Feb. 6. That’s slightly above the stock’s average swing of about 7.1% over the past four quarters.
PayPal’s stock may have lagged the broader market recently, but the company is still expected to deliver growth in both revenue and earnings in the fourth quarter, supported by rising payment volumes. That said, the pace of growth could ease slightly compared to earlier in the year.
A key metric to monitor will be transaction margin dollars, which management expects to come between $4.02 billion and $4.12 billion. At the midpoint, that represents 3.5% growth. When excluding interest earned on customer balances, transaction margin dollars are projected to rise about 5%, a step down from the 7% growth PayPal has posted so far this year. This moderation reflects tougher year-over-year (YoY) comparisons, as PayPal is now cycling against a strong consumer spending period from last year’s holiday quarter.
