PayPal Is Poised for a Rally on Strong Fundamentals and Bullish Momentum

PayPal Holdings, Inc. (PYPL) delivered strong quarterly results, highlighting solid revenue growth and improving profitability. The net revenue increased, driven by stable user activity and resilient demand for digital payments. The company expanded profit margins and posted strong earnings growth. Moreover, operating and free cash flow remained healthy, supporting share buybacks and long-term value. This article presents PayPal’s financial and technical performance to assess investment opportunities for long-term investors. The stock is currently trading within long-term support zones and forming a bullish price structure.

PayPal Q2 2025 Earnings: Fundamentals Show Growth

PayPal reported strong Q2 2025 earnings with solid top-line growth. The net revenue increased 5% year-over-year to $8.3 billion. The chart below shows the consistent growth in sales revenues over the decade.

This increase in revenue was 6.4% compared to Q1 2025, as shown in the chart below. This strong performance demonstrates the resilience of PayPal’s core business, which may boost investor sentiment and provide support to the stock price.

Moreover, the company expanded its profit margins during the quarter. Gross profit reached $3.43 billion. Additionally, operating profits have shown an upward trend over the past few quarters, as illustrated in the chart below. For Q2 2025, operating profit stood at $1.62 billion. Operating margin also expanded by 130 basis points, signalling improved efficiency. This margin expansion reflects stronger operational execution and enhances investor confidence in PayPal’s long-term profitability.

In addition, PayPal delivered a strong bottom-line performance. The EPS increased 18% to $1.40, as seen in the chart below. These strong results reflect enhanced profitability and may help drive further upside in the stock.

However, growth in payment volume remained moderate. Total payment volume (TPV) rose 6% to $443.5 billion. User activity showed signs of stability, with active accounts increasing 2% year-over-year and 0.4% sequentially, adding 1.7 million accounts. These figures reflect a steady user base, and if engagement trends strengthen further, they could support a more bullish outlook for PayPal’s stock.

The company has been generating consistent and strong cash flow over the past few years. In Q2 2025, PayPal reported $0.9 billion in operating cash flow and $0.7 billion in free cash flow. The chart below shows that PayPal’s cash flow has steadily increased in recent years. Strong cash generation, combined with share buybacks, reinforces shareholder value and may offer long-term price support.

Bullish Reversal Pattern Signals Long-Term Rally in PayPal

From a technical perspective, PayPal’s long-term chart reflects substantial price volatility over the past several years. Between 2018 and 2020, the stock developed an ascending broadening wedge pattern, characterised by higher highs and wider price swings. In May 2020, PayPal decisively broke above the wedge resistance at $136.00, which triggered a strong bullish rally. This momentum carried the stock to an all-time high of $309.14 in February 2021.

This surge in stock price was due to strong pandemic-driven growth in digital payments. Lockdowns boosted online shopping, increasing demand for PayPal’s services. The company added millions of new active accounts and reported record transaction volumes. Investors reacted positively to its revenue and earnings beats. Market sentiment favoured tech and fintech stocks during this period.

However, after reaching this peak, PayPal entered a prolonged downtrend amid broader market weakness and company-specific challenges. From mid-2021 through 2022, the stock corrected sharply, erasing much of the earlier gains. Between June 2022 and 2025, the price action entered a consolidation phase, forming a large inverted head and shoulders pattern at the lower levels. This pattern suggests a potential bottoming structure, with the neckline situated near $94.00.

A decisive breakout above the $94 neckline would confirm a strong bullish reversal and could trigger a renewed uptrend in PayPal’s stock price. If validated, this breakout may mark the end of the multi-year correction and set the stage for a sustained long-term recovery. Until then, the pattern remains in development and serves as a key technical formation to watch for investors seeking a reversal opportunity.

Key Support Zone Holds as Bullish Momentum Builds

The weekly chart for PayPal shows strong price volatility as the stock consolidates within a sideways range between $49 and $101. A breakout above $101 could push the price toward the $120 level, while a breakdown below $49 may lead to a decline toward $42. This consolidation suggests a potential bottoming pattern and indicates strong upside potential if resistance breaks.

The $42 level remains a key long-term support. The current price is trading within the broader support zone of $49 to $101. Investors may consider buying at this level in anticipation of a breakout. A confirmed breakout above $120 would likely trigger a strong upward move in PayPal’s stock.

PayPal Strategic Innovations: Crypto, Partnerships, and Global Expansion

PayPal is making bold moves to reshape global commerce through crypto and digital innovation. The company launched Pay with Crypto, a solution that supports over 100 cryptocurrencies and major wallets like Coinbase and MetaMask. It allows merchants to convert crypto to stablecoins or fiat instantly and reduces international transaction fees by up to 90%. This gives PayPal a major competitive edge in the $3 trillion crypto market and opens new revenue streams.

The company also unveiled PayPal World, a unified global payment platform. This initiative connects major digital wallets, including Venmo, Mercado Pago, and Tenpay, enabling seamless international transactions. For consumers, it removes friction in global shopping and transfers. For merchants, it expands reach and simplifies operations. This launch positions PayPal as a leader in inclusive, borderless commerce and could drive long-term growth.

Additionally, PayPal expanded its stablecoin, PYUSD, to Arbitrum, a Layer 2 blockchain that improves speed and lowers transaction costs. This move supports developers with efficient tools for dApps and smart contract deployment across multiple chains. It strengthens PayPal’s presence in the DeFi space and enhances PYUSD’s utility in the evolving blockchain ecosystem. Greater adoption of PYUSD may translate into higher engagement and more financial innovation.

PayPal also deepened its integration with Wix Payments, offering a seamless experience for US merchants. Merchants can now manage PayPal transactions, chargebacks, and payouts directly within the Wix platform.

This broader ecosystem strategy, combined with PayPal’s innovation in digital currencies and payment solutions, is driving renewed optimism around the company’s growth outlook. Reflecting this momentum, PayPal raised its full-year 2025 earnings guidance. The company now expects GAAP EPS between $4.90 and $5.05, and non-GAAP EPS between $5.15 and $5.30. For Q3 2025, projected EPS also exceeds the prior year. This upward revision signals strong profitability and continued business acceleration.

Key Risks

Despite strong Q2 2025 results, PayPal faces several risks that could weigh on future performance. Growth in TPV was moderate at 6%, which may signal saturation in core markets. The slowdown in user growth and only a slight increase in active accounts raise concerns about long-term engagement. If user activity stagnates further, it could limit revenue growth and pressure investor sentiment.

Moreover, the macroeconomic conditions also pose risks. Higher interest rates, tighter consumer spending, and regulatory challenges in the fintech space could impact PayPal’s transaction volumes and profitability. Competitive pressures from Apple Pay, Block, and other digital wallets may erode market share. In addition, any delays in innovation, such as the adoption of stablecoins or new commerce tools, could reduce future growth opportunities. These risks may lead to increased stock volatility and capped upside potential.

Conclusion – Why PayPal Remains a Long-Term Buy

PayPal continues to demonstrate strong financial performance, with growing revenues, expanding margins, and consistent cash flow generation. In addition, the company is driving innovation through crypto integration, global partnerships, and digital wallet expansion.

The stock is currently trading near long-term support levels and is forming bullish patterns that suggest a potential recovery. Furthermore, the three-year price consolidation has created a bullish structure that presents attractive investment opportunities. As long as the stock remains above $42, the potential for upside rallies remains strong. Moreover, a breakout above $120 would likely trigger a significant upward move. Therefore, investors can consider buying at current levels and look to accumulate more positions on any pullbacks.