PayPal Inventory Dives; Creation-Stripe Group Stated To Drop Pursuit Of Funds Large

PayPal’s stock has taken a beating this year. Shares have dropped 40% over the past twelve months and are down more than 27% just since January.

Right now, the stock sits about 45% below its high of $79.50—so yeah, it’s deep in oversold territory, and the RSI is hovering between 30 and 40.

Why’s it losing so much ground? A few things are dragging it down.

First, even though PayPal pulled off 7% revenue growth in Q1 2026 (bringing in $8.4 billion) and saw payment volume jump 11% to $464 billion, profits actually shrank.

Non-GAAP operating income dropped 5% as margins got squeezed—all thanks to heavier spending on AI tech and marketing. Then came weak guidance: management isn’t optimistic about Q2.

They’re expecting only low single-digit revenue growth, a decline in transaction margins, and about a 9% year-over-year hit to non-GAAP EPS. When they announced earnings on May 5, the stock fell another 7.7%.

Competition is a big worry too. The digital payments space is getting crowded, and investors are questioning PayPal’s edge—especially when it comes to Venmo turning into a real digital bank contender.

Now, there’s talk PayPal could get bought out. Reports say Stripe and private-equity firm Advent International are looking to buy PayPal for over $53 billion, or around $60.50 per share.

That’s a solid 28% premium over where shares trade lately. They’ve got about $50 billion in bank financing lined up, and Stripe and Advent would split ownership.

As for the numbers, PayPal’s valuation looks cheap—only about 7.8 times forward earnings and a price-to-sales ratio of 1.09.

That’s way below the usual. Analysts are mostly neutral, with an average price target at $48.30, about 11% higher than today’s price.

PayPal is also planning a $6 billion buyback this year and aiming to cut $1.5 billion in costs over the next couple of years through restructuring and AI.

So, what’s really going on here? PayPal’s story is classic: it’s shifting from a growth darling to value territory.

There’s still strong cash flow and huge payment volume, but investors just aren’t sold on the idea that it can bounce back, especially with so much competition.

If that buyout happens, it might end up being a lifeline, or just an exit route, for frustrated shareholders.