PayPal’s Ads Bet Meets a Skeptical Wall Street as New CEO Prepares First Earnings

PayPal's stock hits a valuation floor not seen since 2015, but structural challenges persist. New CEO Enrique Lores bets on ad tech and NFL partnership to revive growth.

The numbers are stark. PayPal’s stock trades at roughly €42 — down nearly 15% since January and more than 25% below where it stood twelve months ago. Its price-to-earnings ratio has sunk to 8.9, a valuation floor not seen since the company’s 2015 spin-off from eBay. Yet for all the apparent cheapness, the market is treating PayPal less like a bargain and more like a value trap.

That tension will come to a head on May 5, when the payments giant reports first-quarter results before the opening bell. It marks the first earnings release under CEO Enrique Lores, who took the helm in March 2026. Analysts expect earnings per share of $1.29 on revenue of roughly $8.05 billion — modest numbers that do little to mask the deeper structural challenges.

A Data-Driven Pivot With NFL Firepower

PayPal is betting heavily that its transaction data can become a new revenue engine. On April 21, the company was named an official P2P payments partner of the NFL in a multi-year deal. That same week, it announced the launch of PayPal Ads ID, a proprietary advertising identifier set to debut in late April 2026. The system taps into purchasing signals from over 400 million active accounts, bypassing the cookie-based tracking that the broader ad industry is moving away from.

Mark Grether, PayPal’s senior vice president for ads, describes the initiative as replacing “industry guesswork with real purchase relationships.” Initial technology partners include Magnite, PubMatic, Rokt, and Taboola, with integration spanning connected TV environments and native web platforms. The company’s Fastlane product — a passwordless guest checkout feature — is already showing early traction, with merchants reporting conversion rates up to 28% higher than traditional guest checkout.

These moves are designed to stabilize a core business that grew just 1% at the end of 2025. But the ad business is unproven at scale, and the NFL partnership, while high-profile, will take time to translate into meaningful revenue.

Wall Street’s Divided Verdict

The analyst community remains deeply split. Truist Financial’s Matthew Coad recently reiterated a sell rating, raising his price target to $45 but warning that near-term earnings prospects remain weak despite a more resilient US consumer environment. BMO Capital Markets and Bank of America have taken more neutral stances, with targets of $52 and $55 respectively.

The skepticism is rooted in competitive pressure. Apple and Alphabet continue to muscle into digital payments, while buy-now-pay-later providers like Affirm and Klarna are capturing younger users. PayPal’s active account base of roughly 439 million has been essentially flat since the end of 2022. Growth in its high-margin branded checkout button has slowed to just 1%.

Regulatory Clouds and Legal Overhang

Adding to the uncertainty is the PACE Act of 2026 (H.R. 8395), introduced in the US House of Representatives. The legislation would impose new registration and reserve requirements on payment processors, raising compliance costs across the sector. Separately, an ongoing securities lawsuit tied to past revenue forecasts saw a mid-April deadline pass for lead plaintiff designation.

What Investors Want to Hear

Management has signaled that earnings per share will be supported by billions in share buybacks — enough to retire roughly 14% of the current market capitalization. But analysts project revenue growth of barely 3% for the full year, with flat to slightly declining profits.

The May 5 report will offer the first concrete test of whether PayPal’s ad-tech pivot and new partnerships — including those with Google, OpenAI, and Perplexity — can generate measurable results. If they cannot, the stock’s already depressed valuation may have further to fall.