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PayPal’s Takeover Story Ended, But Its Turnaround Story Didn’t

Reported by Nathan Reiff. Published: 9/9/2026.

It's been a tumultuous summer for PayPal Holdings Inc. (NASDAQ: PYPL). Shares surged in July after news broke that Stripe and private equity partner Advent International had offered to buy the payments services firm following months of speculation. Two weeks later, PayPal reported better-than-expected Q2 2026 earnings, throwing investors for a loop and causing some to question whether the deal would actually go through. In mid-August, the price of PayPal shares climbed above the $60.50 price that Stripe and Advent had set in their offer. Two weeks later, the deal fell through, and PayPal shares tumbled.

Ultimately, the collapse of the potential deal does not change PayPal's underlying business or its appeal. The company has a massive number of active users, a growing stablecoin and strong fundamentals across multiple categories. This could make the current moment a good time to consider entering a position in PayPal, regardless of whether the deal becomes a possibility again.

Is PayPal's Price Decline a Buy Opportunity or a Sign of a Takeover Premium?

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Key to an investor's assessment of PayPal at this stage is the fact that the company's board rejected Stripe's offer, which totaled about $53 billion and valued the company at $60.50 per share. This suggests that company leaders viewed the price as insufficient. However, shares of PYPL collapsed by about 13% immediately after the deal fell through. They have since risen marginally but remain below the $60.50 benchmark.

The question, then, is whether the deal's collapse created an opportunity to buy PayPal at a discount to Stripe's rejected offer or whether the sell-off revealed that a takeover premium had artificially boosted the firm's valuation beyond what its underlying business could justify.

PayPal's Q2 earnings suggest the former may be more likely. The company reported earnings per share (EPS) of $1.38, beating analyst predictions by 10 cents, and raised its full-year EPS guidance to $5.38. This positions the stock as a profitable fintech company that is now being valued based on its standalone turnaround potential. Its price-to-earnings (P/E) ratio of 10.4 is modest for the industry, while revenue climbed 4.8% year over year (YOY).

PayPal's moderate but improving sales growth, strong profitability and relatively low earnings multiple may compel investors to take a closer look. Add in the fact that PayPal is one of the most recognizable brands in fintech and boasts a customer base of about 430 million active accounts, and the appeal may grow further.

PayPal's Stablecoin Could Be a Hidden Growth Engine

PYUSD is a stablecoin fully integrated into PayPal's platform. Thanks to the GENIUS Act's regulatory framework, PayPal's stablecoin has achieved notable circulation. This could become a potential driver of future revenue growth as the company earns fee-based revenue from transaction settlements. However, this opportunity is often overlooked by analysts and investors who focus more on PayPal's traditional services business.

Ways the Deal Could Re-Emerge...Plus an Alternative

There are multiple ways the takeover bid for PayPal could re-emerge, potentially throwing investor calculations off once again.

First, Stripe and Advent are free to return with a higher offer. Given that such a deal would likely exceed the previous $60.50 offer, it could represent significant upside beyond what analysts already predict for shares. It's also possible that a different buyer could emerge with an offer that exceeds Stripe's.

As PayPal initiates its latest round of layoffs in September 2026, investors may be inclined to consider alternatives such as Affirm Holdings Inc. (NASDAQ: AFRM).

Although it operates in the same fintech space as PayPal, Affirm has a different dynamic, including accelerating growth, expanding margins and strong conviction from analysts.

The company also beat analyst EPS predictions for the latest quarter. Despite revenue falling slightly short of expectations, sales climbed an impressive 33% YOY. Further, Affirm's EPS beat was fairly monumental: The company reported EPS of $4.62, compared with analyst expectations of just 35 cents per share.

Affirm cannot rival PayPal's user base, but it does have a sizable addressable market, an aggressive diversification plan to expand its offerings and improving margins that suggest it has scaled successfully and sustainably. Investors may want to move on from PayPal entirely and consider a stock with 23 Buy or equivalent ratings from Wall Street analysts, as well as 37% in predicted upside potential.