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PayPal Holdings, Inc. (NASDAQ: PYPL) reported strong third-quarter 2025 results, with revenue growing 7% year-over-year to $8.42 billion, surpassing the $8.23 billion analyst consensus. Adjusted earnings per share (EPS) reached $1.34, exceeding the forecast of $1.20, while total payment volumes rose 8% to $458.1 billion despite a 5% decline in payment transactions. The company introduced a quarterly cash dividend of $0.14 per share, representing approximately 10% of its adjusted net income. Strategic initiatives include partnerships with OpenAI, Alphabet Inc., Google, and Perplexity to integrate AI-driven payment solutions and expand commerce capabilities. CEO Alex Chriss highlighted the importance of adapting to generational shifts, particularly the growing adoption of Buy Now, Pay Later (BNPL) methods among younger consumers, as a key driver for long-term growth. Despite these achievements, analysts remain cautious about PayPal's outlook. Goldman Sachs downgraded the stock to "Sell," citing weaker branded checkout growth, competitive pressures, and limited visibility for a near-term rebound. Concerns about margin growth below consensus and valuation pressure persist, with the average 12-month price target for PayPal declining. Financial metrics show mixed results: while PayPal's net margin of 15.21% exceeds industry benchmarks, its return on equity (6.23%) and return on assets (1.57%) fall below industry averages. The company's debt-to-equity ratio of 0.56 reflects a conservative financial approach. Overall, PayPal's performance highlights growth opportunities in AI and BNPL but faces challenges in maintaining competitive momentum.
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Buy Now Pay Later Can Torpedo Mortgage Chances

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About PYPL

PayPal was spun off from eBay in 2015 and provides electronic payment solutions to merchants and consumers, with a focus on online transactions. The company had 434 million active accounts at the end of 2024. The company also owns Venmo, a ... Read more

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Bearish Option Strategy: Long Puts

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