PayPal: PayPal Holdings' Q1 2025 Earnings: What to Expect

Valued at $61.3 billion by market cap, PayPal Holdings, Inc. ( PYPL ) has been a pioneer of the fintech industry for over two decades. While the San Jose-based fintech giant's payment solutions serve people from diverse demographics, its mobile payment service Venmo, has gained significant traction among the younger generations in recent years. The payments processor is set to unveil its first-quarter results before the markets open on Tuesday, Apr. 29. Ahead of the event, analysts expect PYPL to report an adjusted EPS of $1.15 , up a modest 5.5% from $1.09 reported in the year-ago quarter. On the brighter note, the company has surpassed Street's bottom-line estimates in each of the past four quarters. For fiscal 2025, PYPL is expected to report an adjusted EPS of $5.01, up 7.7% from $4.65 reported in fiscal 2024. While in fiscal 2026, its earnings are expected to surge 12.2% year-over-year to $5.62 per share. PayPal's stock prices have dropped nearly 5% over the past 52 weeks, notably underperforming the S&P 500 Index's ( $SPX ) 4.4% uptick and the S&P 500 Financials Sector SPDR's ( XLF ) 17.5% gains over the same time frame. Despite beating Street's topline and earnings expectations, PYPL stock tanked 13.2% after the release of its Q4 results on Feb. 4. The company delivered a 4.2% year-over-year growth in net revenues to $8.4 billion, surpassing the Street's expectations by 1.2%. Meanwhile, its adjusted EPS increased 4.4% year-over-year to $1.19, exceeding analysts' projections by 5.3%. However, the company's free cash flows dropped by 11.3% year-over-year to $2.2 billion. Furthermore, the company has faced strong competition from Apple Pay recently, which has led to slower-than-expected growth in its branded checkout business. While this division observed slightly higher topline growth compared to 2023, it wasn't enough to impress investors. The consensus view on PYPL is cautiously optimistic, with a " Moderate Buy " rating overall. Of the 42 analysts covering the stock, opinions include 17 "Strong Buys," two "Moderate Buys," 23 "Holds," and one "Strong Sell." As of writing, the stock is trading significantly below its mean price target of $86.69.