When Enrique Lores took the helm at PayPal in March, he inherited a company fighting on two fronts: a core business that is losing steam and a nascent advertising venture that has yet to prove its financial heft. The new chief executive will face his first major test on May 5, when the payments giant reports first-quarter results. The numbers will reveal whether the bleeding in the branded checkout segment has stopped — and whether investors should take the company’s pivot into digital advertising seriously.
Wall Street has already tempered its expectations. Analysts are forecasting earnings per share of $1.27, a 4.5% decline from the same period last year. That aligns with PayPal’s own guidance, which flagged a slight profit dip for the opening quarter. The cautious outlook comes on the heels of a disastrous fourth quarter in 2025, when sluggish growth in the high-margin branded checkout business sent shares plunging in premarket trading. Since the start of the year, the stock has shed roughly 14% of its value, currently trading at €42.48.
A Data Treasure Opens for Advertisers
Amid the earnings gloom, PayPal has been quietly laying the groundwork for a new revenue stream. The company recently launched the “PayPal Ads ID,” a tool that leverages aggregated data from more than 25 billion transactions across over 400 million verified PayPal and Venmo accounts. The pitch to advertisers is simple: instead of relying on probabilistic models to measure campaign effectiveness, the Ads ID connects ad exposure directly to actual purchases, creating a closed-loop measurement system.
The timing is strategic. Stricter data privacy regulations have made traditional tracking methods less reliable, giving PayPal an edge with its verified transaction data. To accelerate adoption, the company has already lined up four launch partners: Magnite, PubMatic, Rokt, and Taboola. The move diversifies PayPal’s business model beyond pure payment processing, though it remains to be seen how quickly ad revenue can offset the drag from the core operations.
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Capital Returns and a Venmo Bright Spot
While the ad play is a long-term bet, PayPal is also deploying near-term financial firepower. The company has announced a $6 billion share buyback program for 2026, alongside a newly introduced quarterly dividend. These capital measures are designed to reassure investors rattled by the stock’s slide. The shares currently trade at a forward price-to-earnings ratio of roughly 9, a steep discount to rivals like Visa and Mastercard.
There are glimmers of operational strength. Venmo, PayPal’s peer-to-peer payments subsidiary, posted double-digit growth in payment volume and rolled out international transfers for its users in March. That momentum could provide a cushion if the branded checkout business continues to struggle.
The Verdict on May 5
For Lores, the immediate priority is stabilizing the branded checkout segment, which remains the primary driver of earnings. If the first-quarter results fail to show a turnaround, even the $6 billion buyback may not be enough to prop up the stock. The average analyst price target stands at $50.67, implying roughly 19% upside from current levels — but that optimism hinges on concrete evidence that the downward spiral has been arrested.
PayPal’s stock has managed to reclaim its 50-day moving average of €39.47 in recent sessions, offering a technical glimmer of hope. But the real test will come when Lores steps up to the microphone on May 5, armed with first-quarter data and a vision for how PayPal intends to compete in both payments and advertising. The market will be listening closely.
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