PYPL arrives at its Q1 2026 earnings call today with the short-selling community in retreat — a notable reversal from the pressure that dominated the spring.
The most telling story heading into this print is what shorts have been doing with their feet. Short interest has fallen steadily for two weeks, dropping roughly 4% from its late-April peak to 4.7% of the free float. The borrow market confirms the same message: availability has loosened sharply as shares freed up for lending, and the cost to borrow has dropped 18% over the past week to just 0.41% annualised — near the cheapest it has been all month. The ORTEX short score has drifted down from 38.4 to 37.0 over the past two weeks. That's a consistent signal of shorts reducing exposure ahead of the number, not adding to it. Options positioning is equally calm. The put/call ratio of 0.42 is fractionally below its 20-day average and well off the 52-week defensive extreme of 0.63. There is no pre-earnings hedging panic visible in the options market.
The analyst community has been active but largely non-committal in the run-up. Several firms raised their targets in the two weeks before the print — BofA moved from $48 to $55, Cantor Fitzgerald from $42 to $54 — yet both held Neutral ratings, a pattern repeated across the Street. The message is that targets needed catching up after the stock's 11% one-month rally to $50.39, but conviction on direction remains limited. The one clear bearish voice, Truist Securities, lifted its Sell-rated target from $39 to $45, still well below where the stock trades. Mizuho moved in the opposite direction, downgrading to Neutral and cutting its target to $50 in mid-April. The mean consensus target now sits at roughly $53 — about 5% above the current price — suggesting the Street views the stock as close to fairly valued at these levels. The bull case centres on strategic repositioning under new leadership and PYPL's competitive moat in branded checkout. Bears point to slowing transaction margin growth, intensifying FinTech competition, and limited near-term catalysts for a re-rating. The forward PE of around 9.2x and EV/EBITDA near 7.3x do not represent a demanding multiple, but the EPS momentum rank — in just the 16th percentile on a 90-day basis — signals that estimate revisions have been running against the company.
History adds context without offering comfort. The February 2026 print was brutal: the stock fell more than 21% in a single session and extended losses to nearly 21% over the following week. The prior Q3 2025 event was far milder, producing only a fractional decline on the day. The variance between those two outcomes underlines how binary PYPL earnings reactions can be. Insiders have been modest net sellers in the run-up, with the EVP and Chief Accounting Officer each trimming positions in late April — small in scale and low significance scores, so not a flashing warning signal, but not a vote of confidence either.
The print is therefore less a test of whether PayPal can grow and more a test of whether the branded checkout trajectory has stabilised enough to justify the $50 handle the stock has reclaimed over the past month.
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