PYPL Slips Premarket After Its Best Day Ever: Why This Analyst Says A Buyout Is Far From A Done Deal

• Morningstar says the market’s discount to the offer price reflects uncertainty despite the strategic rationale.
• Retail traders want more, although Stocktwits sentiment is ‘extremely bullish’ and some foresee competing bids.
• PayPal still trades at a valuation discount to peers like Visa and Block.

PayPal, Inc,'s stock was down nearly 1% in early premarket trading on Thursday, a day after a record session driven by reports of a take-private deal valuing the payments giant at $53 billion. Now, Wall Street analysts are already questioning whether it will happen.

According to Reuters, Stripe and private equity firm Advent International have made an offer to acquire PayPal at $60.50 a share. The market, however, is not fully buying it as shares remain roughly 10% below the reported offer price, a gap that Morningstar analyst Brett Horn said reflects genuine skepticism about whether a deal gets done.

Morningstar's Take On PYPL Stock

Horn sees strategic logic in the combination. "While Stripe has enjoyed strong growth, we think adding PayPal could strengthen its hand in the online space," he wrote, noting that scale-based cost advantages are the primary moat in payments and that PayPal's volume would meaningfully add to that moat. "PayPal's current stock price offers an opportunity to add volume and capabilities on the cheap."

But Horn stopped short of endorsing the deal as likely. Morningstar is maintaining its $80 fair value estimate for PayPal for now. "If we think a deal becomes the most likely outcome, we will adjust our fair value estimate to the acquisition price. But at this point, the likelihood of a deal and its terms remain in question," he said.

Horn did acknowledge the board may find the offer difficult to reject outright. While the $60.50 bid sits well below Morningstar's fair value, it represents a sizable premium to recent market prices, and PayPal is in the middle of a CEO transition, with limited time to demonstrate results under its new strategy. Just under six months ago, PayPal replaced Alex Chriss with former HP CEO Enrique Lores. The stock responded positively in May to Lores' plans to accelerate AI adoption for cost savings, though Morningstar has described 2026 as likely to be a transition year.

PYPL Deal: Retail Wants More

Retail traders on Stocktwits are locked in and largely unimpressed by the offer price (just like "The Big Short" investor Michael Burry). Message volume for PYPL surged over 1,200% in the past week, the follower count has climbed steadily, and sentiment has swung to 'extremely bullish' from 'bearish' just a week ago. The mood is less about celebrating the bid and more about demanding a better one.

"Any price below $100 is a steal," one user wrote. "PayPal would have bought back 400 to 500 million shares within the next five years. A price of $60 per share would be under $30 billion in valuation in five years after buybacks. Stripe wants PayPal because they know that."

Another mapped out the paths to a higher price. "The next major catalyst is the board's official response. If the board publicly states that $60.50 substantially undervalues the company, the stock will likely hold its gains and creep higher as arbitrageurs price in a revised offer. The ultimate fuel for $70 is a multi-bidder scenario — if firms like Block feel threatened by a Stripe-PayPal combination, they may step in with a competing proposal, forcing Stripe and Advent to dig deeper."

Where PYPL's Valuation Stands

On Wall Street, PYPL holds a consensus 'Hold' rating among 43 analysts, with the average price target implying the stock is already trading at a nearly 7% premium to fair value, per Koyfin. PayPal's forward price-to-earnings ratio of 10.2x still makes it more attractive compared with Block's 19.6x and Visa's 25.5x. Still, the stock is down nearly 5% year-to-date.

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