PayPal at 11x P/E, 8% Annual Buyback: Q2 Earnings Preview

According to 24/7 Wall St., PayPal (ticker: PYPL) presents an unusual picture ahead of its Q2 earnings report on July 28, 2026. Trading at a price-to-earnings (P/E) ratio of just 11x — half that of rival Visa (V) at around 22x — the company is also repurchasing 8% of its outstanding shares annually. This combination of low valuation and aggressive buyback comes after a rejected buyout offer, prompting questions about whether the stock is a buy before earnings.

Recommendation Change

No specific analyst recommendation change was reported, but the report suggests the market may be overly pessimistic about PayPal, especially given the large buyback program supporting the stock.

Analyst Rationale

Analysts see the low 11x P/E valuation relative to Visa's 22x as potentially not reflecting PayPal's strong free cash flow generation. The 8% annual buyback reduces the share count rapidly, boosting earnings per share (EPS) even if profits remain flat.

Context

Recent stock performance has been relatively weak, but the rejection of a buyout offer may signal management's confidence in the company's intrinsic value. Other analysts are divided between seeing a buying opportunity and warning of continued competitive pressures.

What We Conclude

Investors face a stock with low valuation and a strong buyback program, but risks from competition and market shifts remain. Monitoring Q2 earnings for clearer signals on the company's future is advisable.