Long Trade Idea
Enter your long position between $41.43 (yesterday’s intra-day low) and $43.70 (yesterday’s intra-day high).
Market Index Analysis
- PayPal (PYPL) is a member of the NASDAQ 100, the S&P 100, and the S&P 500 indices.
- All three indices are retreating from all-time highs with rising bearish trading volumes.
- The Bull Bear Power Indicator of the NASDAQ 100 index is bearish with a descending trendline.
Market Sentiment Analysis
Equity markets turned lower yesterday as earnings rolled in, AI-related earnings failed to validate the massive rally, and fears that AI tools would replace software and related jobs mounted. PayPal plunged following its earnings release, but Walmart became the latest member in the $1 trillion club, driven by value-seeking consumers. Gold and silver jumped as bottom hunters stepped in. AMD sold off in after-hours despite upbeat earnings and an improved outlook, while Chipotle also extended its losses. The four-day partial government shutdown ended, and all eyes are on Alphabet’s earnings today.
PayPal Fundamental Analysis
PayPal is a financial technology company focused on mobile and online payments. It added support for cryptocurrency purchases, operates in 202 markets, has 425M active accounts, and supports 25 fiat currencies.
So, why am I bullish on PYPL despite its massive post-earnings plunge?
PayPal reported revenues of $8.68 billion and earnings per share of $1.23, missing estimates of $8.79 billion and $1.28, respectively. Its lackluster 2026 outlook caused a massive overreaction, which I view as a once-in-a-decade buying opportunity for PYPL. Valuations are extremely attractive for patient investors, and I am also bullish about the potential of integrated advertising and its Transaction Insights service. The 5-year PEG ratio suggests the company is undervalued, and I view the announced leadership change as a bullish catalyst.
Metric | Value | Verdict |
P/E Ratio | 7.71 | Bullish |
P/B Ratio | 2.42 | Bullish |
PEG Ratio | 0.53 | Bullish |
Current Ratio | 1.34 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earning (P/E) ratio of 7.71 makes PYPL an inexpensive stock. By comparison, the P/E ratio for the NASDAQ 100 is 35.36.
The average analyst price target for PYPL is $68.91. It suggests excellent upside potential with fading downside risk.
PayPal Technical Analysis
Today’s PYPL Signal
- The PYPL D1 chart shows a capitulation sell-off and is inside a triangle formation.
- It also shows price action between the descending 0.0% and 38.2% Fibonacci Retracement Fan levels.
- The Bull Bear Power Indicator is deep in bearish territory and shows a potential bearish washout.
- The average bearish trading volumes spiked, confirming a mass exodus of bearish positions.
- PYPL corrected more than the S&P 500, a significant bearish confirmation, but bullish catalysts remain strong.
My PYPL Long Stock Trade
- PYPL Entry Level: Between $41.43 and $43.70
- PYPL Take Profit: Between $57.55 and $63.93
- PYPL Stop Loss: Between $33.56 and $37.29
- Risk/Reward Ratio: 2.05
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