Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTMarc Guberti, The Motley FoolWed, June 24, 2026 at 5:25 PM GMT+2 4 min readPayPal's (NASDAQ: PYPL) share price has stumbled by more than 25% year to date, and the stock now trades at a P/E ratio of 8. However, that doesn't make it a buy right away, and it may never climb to a lofty P/E ratio now that the growth narrative is mostly dead.A premium valuation requires premium growthPayPal delivered 7% year-over-year revenue growth in the first quarter, which is well below that of emerging fintech stocks like SoFi Technologies (up 41% in Q1) and Robinhood Markets (up 15%). PayPal's revenue compound annual growth rate (CAGR) has been declining in recent years. It has a 10-year CAGR of 13.9%, but only a 7.2% CAGR over the past three years.Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »Image source: Getty Images.PayPal isn't delivering high user growth rates either. The company reached 439 million daily active users in Q1, which only represents a 1% year-over-year increase. Meanwhile, Meta Platforms, a company known by almost everyone, delivered 4% year-over-year user growth but turned that into 33% year-over-year revenue growth. More specifically, in fintech, SoFi grew its user base by 35% year over year.PayPal doesn't have the exciting user growth rates of SoFi, and it can't translate low user growth into surging sales the way Meta Platforms can. PayPal CEO Enrique Lores said in the Q1 press release that he was confident that the company would soon return to "a more durable path to long-term growth," but the multiyear trend makes it an uphill battle.Competitors are squeezing marginsPayPal didn't have many competitors in its early days, but that has changed. Apple and Alphabet have payment apps that bypass PayPal for transactions, which is how PayPal makes most of its money. Stripe is another major competitor, and as more companies enter the crowded arena, the best way to gain traction is to have lower fees.This sets up a race to the bottom, and when it comes to such races, Apple and Alphabet can wait out almost anyone. That's not to suggest PayPal will go out of business. It has far too many users and has become an established brand. However, it will make it even more difficult for the company to gain meaningful market share and expand margins in the years ahead, and that can be enough to keep the stock at a low valuation.PayPal's guidance hints at this reality. The company is projecting a mid-single-digit year-over-year decline in its full-year 2026 GAAP EPS growth rate.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info