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PayPal Holdings’ stock came under renewed pressure after several analysts downgraded their recommendations, despite the shares trading at valuation levels considered historically low. The move reflects growing skepticism over the company’s ability to regain the strong growth momentum that once defined its performance.

The downgrades come as PayPal’s share price has declined by more than 35% over the past year, prompting some investors to view the stock as undervalued. However, ongoing operational and structural challenges have limited the appeal of this argument and weakened expectations for a swift recovery.

Currently trading at just over 10 times forward earnings, PayPal’s valuation highlights the erosion of its traditional growth premium. Market participants increasingly question the platform’s competitive strength as the global e-commerce landscape undergoes rapid transformation driven by artificial intelligence technologies.

PayPal continues to face mounting pressures, including weakening pricing power, slower operating margin expansion, and difficulties in achieving operating leverage. At the same time, the rise of AI-driven automated commerce models, built around intelligent agents, represents a growing threat to traditional payment systems.

Despite maintaining a broad global user base of approximately 438 million active accounts, scale alone is no longer sufficient to guarantee sustainable growth or protect market share amid intensifying competition.

From a financial perspective, forecasts suggest profit margins may stabilize in the near term. However, persistent regulatory uncertainty, evolving compliance requirements, and heightened competition from major technology firms and alternative payment platforms continue to complicate PayPal’s recovery path.

Analysts note that regulatory risks and the accelerating adoption of artificial intelligence further weaken the outlook for a positive turnaround, tilting the risk-reward balance toward the downside in the current phase.

While PayPal remains a key global player in digital payments, current indicators suggest that restoring its former market appeal may prove longer and more complex—largely dependent on the company’s ability to adapt technologically, accelerate innovation, and improve operational efficiency in an increasingly competitive environment.