PayPal Stock Plummets 9% Post-Earnings: Market Overreaction or Strategic Entry Point?
PayPal shares tumbled 9% on July 29 following Q2 earnings, despite management maintaining its $6B-$7B free cash FLOW target for 2025. The drop stemmed from a 49% YoY decline in quarterly free cash flow to $692M—a timing issue rather than structural weakness. CEO Alex Chriss' contract renegotiations are improving transaction margins, signaling latent profitability potential in this slow-growth fintech stalwart.
While active accounts grew just 2% and revenue climbed 5%, PayPal's operational overhaul under Chriss reveals deliberate prioritization of quality over quantity. The market's knee-jerk reaction overlooks the company's unchanged long-term guidance, creating a potential mispricing for disciplined investors.