PayPal's Q3 Earnings Outlook Amid Growing Competition

$PayPal (PYPL.US)$ is set to report its Q3 earnings on Tuesday, Oct. 29, with analysts expecting EPS of $1.07—a year-over-year decline of 17.7%—due to increased costs from AI investments and infrastructure needs for its BNPL model. However, revenue is projected to grow by 6.6% to $7.89 billion, indicating some resilience despite tight margins.

Key Competitive Pressures
PayPal’s new CEO, Alex Chriss, faces significant competitive challenges:

$Apple (AAPL.US)$ : Expanding in peer-to-peer and contactless payments.
Block Inc.: Driving growth in Cash App and Square.
X (Twitter): Reportedly developing Venmo-like features under Elon Musk, a former PayPal co-founder.
Positive Catalysts
“Pay in 4” BNPL Growth: Popular among younger users.
Generative AI & Crypto: Expansion in digital tools and cryptocurrency services.
Emerging Market Focus: Southeast Asia mobile payments, aided by partnerships with Adyen, Fiserv, and Global Payments.
PayPal USD Stablecoin: Enhances digital transaction options, potentially strengthening its ecosystem.