PayPal's Canva Gambit Meets a Core Business Under Siege

PayPal invests $400M to shore up its core checkout business and partners with Canva to tap the creator economy, as it faces slow growth and investor skepticism.

PayPal is placing a $400 million bet to defend its home turf while simultaneously opening a new front in the creator economy. The dual-track strategy, unfolding under new leadership, highlights the payment giant's urgent fight to stabilize its foundational business and capture future growth, all while navigating legal scrutiny and investor skepticism.

The pressure on PayPal's core is stark. In the fourth quarter of 2025, its branded online checkout business grew a mere 1%. The company missed market expectations for both adjusted earnings per share, reporting $1.23 versus an anticipated $1.29, and revenue, posting $8.68 billion against forecasts of $8.82 billion. For the full year 2026, analysts project PayPal's U.S. user base will reach approximately 92.1 million, a razor-thin lead over Apple Pay's projected 90.5 million. Google Pay follows with 55 million users.

This competitive squeeze is reflected in the actions of major investors. In the final quarter of 2025, Douglas Lane & Associates slashed its position by 20.6%, selling about 147,000 shares. Company insiders have also been sellers, offloading a total of 87,608 shares worth roughly $3.83 million over the past 90 days. These sales included transactions by the Chief Accounting Officer and an Executive Vice President in early March 2026.

Against this challenging backdrop, CEO Enrique Lores, who assumed the role in March 2026, is pushing for product innovation and cost discipline. The $400 million investment is aimed squarely at shoring up the branded checkout experience. Yet, the company's forward price-to-earnings ratio of 8.4x, well below the industry average of 16.4x, underscores deep-seated market doubts. Analysts remain cautious, with a consensus "Hold" rating and an average price target of $56.72. BNP Paribas Exane recently raised its target from $41.00 to $43.50 but maintained a "Neutral" stance, still implying downside from the current price around €38.62.

Concurrently, PayPal is pushing into new territory. Since April 9, 2026, Canva's 265 million monthly global users can embed PayPal Payment Links directly into their designs. This integration turns any flyer, social media post, or invitation into a potential checkout page, eliminating the need to redirect customers to external shops. The feature supports multiple currencies across roughly 200 markets, accepting payments via PayPal, Venmo, and PayPal Pay Later.

The Canva move is a strategic play for the burgeoning creator commerce market, which industry forecasts predict will surpass $1 trillion by 2028. It aims to embed PayPal deeper into social and creative workflows. Operationally, PayPal points to solid 2025 metrics: $1.79 trillion in total payment volume, $33.2 billion in net revenue, and 439 million active accounts.

However, significant headwinds persist. The company is contending with the aftermath of a difficult leadership transition. In February 2026, PayPal reported weaker-than-expected quarterly results and announced the departure of then-CEO Alex Chriss, triggering a single-day stock drop of around 20%. Law firm Faruqi & Faruqi is now investigating potential shareholder claims, with a deadline for lead plaintiff motions set for April 20, 2026.

The coming weeks are critical. The market expects first-quarter 2026 earnings per share of $1.27, which would represent a 4.5% decline year-over-year. On May 19, 2026, the virtual annual meeting will see shareholders vote on a new equity incentive plan authorizing up to 83.7 million shares. The results will offer a gauge of investor confidence in Lores's turnaround plan. The fundamental question remains whether initiatives like the Canva partnership can translate into higher-margin branded volume or merely add low-quality transactions, leaving the core business vulnerable.