PayPal Stock's Death Cross Looms - Will It Trigger A Turnaround?

PayPal Holdings Inc. PYPL is on the verge of triggering a Death Cross, a bearish technical signal where the 50-day simple moving average falls below the 200-day moving average.

While the stock has tumbled 23.7% year to date and 5.7% in the past month, analysts at Mizuho still see upside, maintaining an Outperform rating with a $96 price target, reported Investing.

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PayPal Stock Technicals Flash Warning Signs

PayPal stock is struggling below key moving averages, reinforcing a strongly bearish trend despite signs of buying pressure. The eight-day simple moving average at $68.31 and the 20-day at $68.67 both suggest weakness, while the 50-day at $75.49 and 200-day at $75.28 highlight the broader downtrend.

With the Moving Average Convergence Divergence (MACD) indicator at a negative 2.21 signaling further downside risk and a Relative Strength Index (RSI) of 32.09, PayPal stock is approaching oversold territory.

Mizuho Remains Bullish

Despite PayPal stock’s technical struggles, Mizuho remains optimistic about its long-term prospects. The firm sees growth potential in Pay with Venmo, which has higher transaction margins than PayPal's traditional checkout service. With Pay with Venmo's Total Payment Volume expected to grow over 40% annually, Mizuho believes this could significantly boost overall transaction margin dollar growth.

PayPal's valuation stands at 17 times its estimated 2026 earnings per share, slightly above the median for legacy payments firms but still below historical levels. Mizuho argues that the company's strategic initiatives—including improvements in user experience and Fastlane adoption—justify this modest premium.

A Path To Recovery?

While a death cross looms as a bearish technical indicator, PayPal is pushing forward with growth plans. The recent appointment of Microsoft Corp's MSFT Joy Chik to the Board signals a focus on AI-driven innovation.

Additionally, Apple Inc's AAPL decision to open its NFC chip to third-party apps could enable PayPal to expand tap-to-pay services, a potential game-changer in mobile payments.

For now, the trend remains bearish, but if PayPal's strategic initiatives gain traction, the stock may yet prove the skeptics wrong.

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