PayPal Bets on Ads and NFL as It Navigates Legal and Structural Shifts

PayPal’s stock gained 6.1% on Wednesday as the company unveiled a dual strategy to redefine its business model. The payments giant announced a new advertising product and a multi-year partnership with the National Football League, signaling a pivot from pure transaction processing toward a platform integrating payments, data, and marketing.

The new “Curated Ads” solution targets brands advertising on connected TV and the open web. Its key differentiator, according to PayPal’s advertising chief Mark Grether, is a focus on measuring actual purchases rather than clicks or intent signals. The offering leverages the platform’s base of approximately 25 billion annual transactions to promise advertisers less waste in the programmatic market.

This strategic push coincides with significant internal restructuring. The company has spun off its cryptocurrency operations into a new subsidiary, PayPal Digital, Inc., effective April 20. User accounts were automatically migrated, though regulatory approval for the new entity is still pending. The move aims to create a clearer separation between traditional payments and digital asset custody. PayPal’s proprietary stablecoin, PYUSD, is now available in 70 markets, facilitating faster and cheaper cross-border transfers.

Meanwhile, the deadline for lead plaintiffs in a significant class-action lawsuit against PayPal expired on April 20. Investors allege management misled them about revenue forecasts and downplayed macroeconomic risks. This legal challenge follows a turbulent period; in February, PayPal missed earnings expectations and unexpectedly replaced its CEO, causing the stock to plunge roughly 20% to $41.70. The board also scrapped its previous financial targets for 2027.

Against this backdrop, the upcoming first-quarter earnings report on May 5 takes on heightened importance. Management anticipates currency-adjusted revenue growth in the low single-digit percentage range. The results will be among the first presented under the leadership of incoming CEO Enrique Lores.

Should investors sell immediately? Or is it worth buying PayPal?

The newly announced NFL partnership embeds PayPal and Venmo as the league’s official peer-to-peer payment partners, integrating them into fan experiences from ticket purchases to stadium spending. This deal provides a global reach lever for the company’s services.

Despite recent gains, PayPal’s stock, trading around €43.56, remains well below its 52-week high of €67.50, though it is about 32% above its February low. On a yearly basis, the shares are still down approximately 14%. The valuation remains subdued, with the stock trading at a price-to-earnings ratio of about 9x, a significant discount to the industry average of nearly 17.

The company’s subsidiary Venmo is showing resilience, with transaction volume growing at a double-digit percentage rate. Its enhanced rewards program, Stash, now offers customers up to five percent cashback at select merchants.

PayPal’s transformation is now unfolding on multiple fronts. The success of its new advertising venture and high-profile NFL deal, coupled with its ability to manage legal challenges and demonstrate growth in the upcoming earnings, will determine if the market reassesses its discounted valuation.