PayPal hits oversold level not seen since 2016
Online payment processor and portal PayPal (Nasdaq: PYPL) peaked at $121.48 back in July and has now fallen for four straight weeks. The selling that has hit the stock coincides with weakness in the overall market, but it has caused an overbought/oversold indicator to reach its lowest level since June 2016. The weekly stochastic readings, specifically the %K reading, have dropped below the 20 level for the first time in over three years.
Even during the fourth quarter selloff in the overall market, PayPal held up better than most stocks, and then when the market rallied in the first quarter the stock moved up over 25% from the December low through the end of March. It continued to climb in the second quarter and half way through July.
PayPal did drop below its 52-week moving average during the fourth quarter, but the oscillators never reached oversold territory. The longer-term moving average of 1o4 weeks never came in to play.
Looking at a shorter term indicator, the Tickeron Technical Analysis Overview noted that “the lower Bollinger Band was broken -- a price increase is expected as the ticker heads toward the middle band, which indicates a buy or call consideration for traders. In 20 of 26 cases where PYPL's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued Uptrend are 77%.”
The fundamentals for PayPal are really strong. The company has been able to grow earnings at an average annual rate of 28% over the last three years. The most recent quarterly report showed earnings growth of 48% on a year over year basis. Analysts expect earnings to grow by 30% for 2019 as a whole.
Sales have also grown at a solid pace, growing by 19% per year over the last three years and growing by 12% in the most recent quarter.
The management efficiency measurements are slightly above average with a return on equity of 18.6% and a profit margin of 23%. It is also worth noting that the company doesn’t have any long-term debt.
One of the biggest concerns for PayPal at this time is its valuation. The Tickeron Valuation Rating is a 72 and indicates that the company is slightly overvalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks.
The sentiment toward PayPal is slightly more optimistic than the average stock. According to the Wall Street Journal, there are 39 analysts following the company. There are 30 “buy” ratings, eight “hold” ratings, and one “sell” rating. This puts the buy percentage at 76.9% and that is slightly above the high end of the normal range of 65% to 75%. One interesting note about the analysts’ ratings is that there were 44 analysts following the company just two months ago.
The short interest ratio is also slightly skewed to the optimistic side with a reading of 2.0 at this time. There is also an interesting development on this indicator. The number of shares sold short dropped from 15.5 million shares to 12.4 million shares from mid-July through the end of July. This drop in short interest happened as the stock was falling, so it would appear as though short sellers were taking gains.
The overall outlook for PayPal is pretty strong based on the fundamentals and the oversold reading from the weekly stochastics. The sentiment is a little worrisome, but given the way the company has performed in recent years, the optimism seems to be warranted.
Contributor
Harry Richardson — Algorithmic Trader & Strategy Developer Harry is an algorithmic trader specializing in impulse and breakout trading strategies across cryptocurrency and equity markets. With more than 10 years of experience in developing automated trading systems, he focuses on building structured algorithms designed to capture momentum while maintaining strict risk control. His approach combines quantitative analysis, real-market execution, and continuous performance monitoring. Vitalii prioritizes risk management, drawdown control, and strategy stability over short-term optimization, ensuring algorithms are adaptable to changing market conditions. He has developed and tested hundreds of automated strategies, working extensively with live trading environments, forward testing, and portfolio-level algorithm management. His work centers on transforming trading ideas into fully operational, scalable automated systems.
PYPL in downward trend: price dove below 50-day moving average on September 08, 2026
PYPL moved below its 50-day moving average on September 08, 2026 date and that indicates a change from an upward trend to a downward trend. In 28 of 35 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are 80%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day moving average for PYPL crossed bearishly below the 50-day moving average on September 10, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 9 of 13 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 69%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PYPL declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 75%.
PYPL broke above its upper Bollinger Band on September 25, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for PYPL entered a downward trend on September 21, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where PYPL's RSI Indicator exited the oversold zone, 32 of 44 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 73%.
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 39 of 58 cases where PYPL's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 67%.
The Momentum Indicator moved above the 0 level on October 01, 2026. You may want to consider a long position or call options on PYPL as a result. In 60 of 90 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 67%.
The Moving Average Convergence Divergence (MACD) for PYPL just turned positive on September 25, 2026. Looking at past instances where PYPL's MACD turned positive, the stock continued to rise in 31 of 51 cases over the following month. The odds of a continued upward trend are 61%.
Following a +4.82% 3-day Advance, the price is estimated to grow further. Considering data from situations where PYPL advanced for three days, in 184 of 291 cases, the price rose further within the following month. The odds of a continued upward trend are 63%.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 39 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 47 (best 1 - 100 worst), indicating steady price growth. PYPL’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 64 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.343) is normal, around the industry mean (3.945). P/E Ratio (10.261) is within average values for comparable stocks, (14.459). Projected Growth (PEG Ratio) (0.958) is also within normal values, averaging (3.918). Dividend Yield (0.010) settles around the average of (0.050) among similar stocks. P/S Ratio (1.428) is also within normal values, averaging (5.901).
The Tickeron PE Growth Rating for this company is 77 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. PYPL’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock worse than average.
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General Information
a provider of digital and mobile payments on behalf of consumers and merchants
Industry SavingsBanks
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