PayPal is entering a critical week with two major developments that could reshape its future: a corporate restructuring that has reignited breakup speculation, and a bold move into digital advertising. Both initiatives will be under the microscope when the company reports first-quarter earnings on May 5.
The payments giant announced on April 29 that it would reorganize into three distinct business segments: Checkout Solutions & PayPal, Consumer Financial Services & Venmo, and Payment Services & Crypto. The creation of a standalone reporting structure for Venmo, which boasts nearly 100 million users, is the most eye-catching element of the overhaul.
Gordon Haskett, an investment bank focused on event-driven strategies, wasted no time in flagging the potential implications. Analyst Don Bilson placed PayPal on the firm’s internal “breakup watchlist,” arguing that such segmentation often precedes a sale or spin-off. He pointed to a February 2026 Bloomberg report that Stripe had explored acquiring parts or all of PayPal, suggesting the Venmo carve-out may have emerged from discussions with potential buyers.
Not everyone is convinced the restructuring signals a near-term transaction. Morgan Stanley’s James Faucette maintained his sell rating and $34 price target, arguing that while the reorganization brings greater clarity and accountability, it does not address underlying problems in branded checkout, Venmo, or the Braintree unit. He also criticized management for prioritizing share buybacks over investing in product development and merchant adoption of Venmo.
The broader analyst community remains cautious. Of 53 analysts covering the stock, the majority recommend a “hold,” with an average price target of around $53.
Should investors sell immediately? Or is it worth buying PayPal?
Meanwhile, PayPal is pursuing a new revenue stream that has nothing to do with payment processing. The company has launched “PayPal Ads ID,” a proprietary advertising identifier that leverages its vast trove of verified transaction data. The system connects ads directly to real PayPal and Venmo accounts, operating across devices and providing advertisers with precise attribution data — a closed-loop proof of purchase that traditional cookie-based tracking struggles to match.
The scale is formidable: more than 400 million accounts and roughly 25 billion processed transactions underpin the initiative. To accelerate adoption, PayPal is offering the identifier free of charge to ad-tech partners. Early adopters include Magnite, PubMatic, and Taboola. The company says all transaction details are encrypted, ensuring that advertisers receive high-quality identity data without accessing sensitive user information.
The timing of the ad-tech push is no coincidence. PayPal’s core payments business has been under pressure, with the stock falling sharply in February after disappointing quarterly results. The shares currently trade at around €42.80, down roughly 13% year-to-date and nearly 28% over the past 12 months. The stock has recently stabilized, moving above its 50-day moving average after hitting a 52-week low, but remains well below its 200-day average.
Analysts expect first-quarter earnings per share of $1.27, a decline of about 4.5% from a year earlier. Revenue is forecast to rise just over 4% to $7.31 billion, with total payment volume approaching $448 billion. Management is expected to provide further details on both the new corporate structure and the advertising business during the earnings call.
For a company whose stock has lost nearly a third of its value over the past year, the May 5 report represents more than just a quarterly check-in. It is an opportunity to demonstrate that the core branded checkout business is regaining momentum — and that the new ventures can deliver results before analysts’ expectations of declining earnings over the next three years become a self-fulfilling prophecy.
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