The promise of PayPal
Back in 2015, PayPal became its own company and started trading independently on the Nasdaq under the ticker PYPL. At the time, digital payments were booming, and PayPal looked like the future of money. If you had put down $1,000 when shares first closed at about $40, you probably imagined that a decade later you’d be sitting on a small fortune.
But here’s the reality check: with PayPal’s stock closing at $66.98 on May 2, your original $1,000 investment would now be worth about $1,702. That’s a profit of just $702 in ten years. Not terrible, but far from the life-changing gains many investors dream about.
The highs were very high
Now, let’s be fair. PayPal hasn’t been all doom and gloom. In fact, at its peak in July 2021, the stock soared to a jaw-dropping $308.53 per share. If you had bought in 2015 and sold at the high, your $1,000 investment would have grown to a whopping $7,713. That’s a $6,713 profit, and more than enough for a vacation, a new car, or even a big dent in your mortgage.
But here’s the catch: timing the market is nearly impossible. Most long-term investors held on, hoping the good times would last. Unfortunately, PayPal’s price tumbled after 2021, shrinking those eye-popping gains to today’s much smaller returns.
Why did PayPal lose its shine?
So, what went wrong? A few key things explain the drop:
- Fewer users. Since 2022, PayPal has lost about 10 million active accounts. It still has over 425 million users, but Wall Street doesn’t like shrinking numbers.
- Slower growth. Revenue growth has cooled to just 5% to 10% annually. Compare that with 2021, when PayPal sometimes posted 20%-plus growth, and you can see why investors got less excited.
- Tough competition. Newer apps like Cash App, Venmo (ironically owned by PayPal), and even traditional banks’ payment services have made the space more crowded.
Put all that together, and it’s clear why PayPal’s stock has slipped.
Should you buy PayPal today?
This is the million-dollar question. On one hand, PayPal is still a big player in the digital payment world with a market cap of nearly $70 billion. It also has a relatively low price-to-earnings ratio of 16.85, which makes it look like a bargain compared to some tech stocks.
On the other hand, the company doesn’t have the same growth story it once did. It feels less like a rocket ship and more like a steady boat. That doesn’t make it a bad investment—it just means you shouldn’t expect to “strike gold” by buying in now. PayPal may be a solid value stock, but it’s no longer the high-flyer it was a few years ago.
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The bottom line
If you had invested $1,000 in PayPal ten years ago and held it, you’d be up about 70% today. That’s not awful, but compared to other tech stocks over the same period, it’s a bit underwhelming. The real winners were the folks who bought in early and sold during the 2021 peak.
PayPal still has millions of users and a recognisable brand, but it’s facing serious competition and slower growth. Whether it’s worth buying now depends on what you want as an investor: a steady, established company or something with more explosive potential.
For now, PayPal may be less of a jackpot and more of a long-term “wait and see”.
