PayPal Gains Momentum as Venmo Expands and Investors Increase Stakes
PayPal is seeing rising traction in its Venmo unit and upward guidance revisions. Meanwhile, Bernstein lifted its price target and investor Michael Burry added to his position.
PayPal Holdings, Inc. is gaining traction following its third-quarter 2026 financial results, which beat Wall Street expectations and prompted management to raise full-year guidance. Non-GAAP earnings for the period climbed 8% year over year to $1.45 per share, while transaction margin dollars rose 2% to $3.95 billion. Consequently, PayPal raised its full-year 2026 non-GAAP earnings forecast to approximately $5.60 per share, up from its prior projection of $5.38.
A key contributor to the performance was Venmo, which registered its eighth straight quarter of double-digit expansion. Venmo's total payment volume increased 14% year over year to $96.8 billion, generating 20% of PayPal's overall payment volume compared to 19% in the prior-year period. Pay with Venmo volume jumped 43%, and debit card monthly active accounts climbed more than 55% to 6.7 million after a record 1.6 million first-time users were added. Management noted that debit card customers produce five to six times higher average revenue per account than those using peer-to-peer services alone.
On Wall Street, Bernstein analyst Harshita Rawat lifted the firm's price target on PayPal to $60 from $55 while maintaining a Market Perform rating. The firm cited high free cash flow yield, the possibility for meaningful shareholder capital returns, and broader sector opportunities. In addition, prominent investor Michael Burry stated on Substack that he purchased additional shares around the $59 level, pointing to the company's aggressive buybacks following an earlier rejected buyout offer from Advent-Stripe.
The positive sentiment comes amid mixed views across the financial sector. Barclays recently downgraded the stock following earnings, pointing to concerns around slower sales growth, branded checkout headwinds, and pressure from rivals like Apple and Block's Cash App. Longer-term, PayPal shares have fallen 72.4% over five years, though the stock has rebounded 30.8% across the past six months and currently carries a Zacks Rank #3 (Hold).