PayPal Challenged by Growth Headwinds

General Commentary & Highlights

• PayPal’s stock dropped 9% after PayPal issued low guidance and warned of a transition year.
• PayPal's account numbers fell for the first time while net revenue remained disappointingly flat,
  in part due to ongoing price pressure (net take rate declined by more than 50 bps since 2019).
• PayPal’s recent strategy to price compete aggressively for unbranded volumes of enterprise merchants (our market observation) share seems to have exacerbated revenue margin pressure, though it has generated strong volume growth for Braintree.
• PayPal’s wallet is losing share to Apple Pay, which provides broader omnichannel coverage and experience than does PayPal (this feels like PayPal’s failures @ POS coming home to roost).