PayPal Shares Plummet Amid Technical Issues, Analysts Expect Growth Potential

PayPal shares dropped 2.2% in premarket trading due to a technical glitch impacting German transactions. Analysts forecast significant growth potential with an average target price of $82.52, representing an 18.86% upside from the current price of $69.42. GuruFocus estimates suggest a notable upside of 26.13%. The technical issue underlined the importance of robust anti-fraud measures in the payment industry.

PayPal shares (NASDAQ: PYPL) fell 2.2% in premarket trading on July 2, 2025, following a technical glitch that affected German transactions. The issue, which involved unauthorized direct debits from PayPal accounts, temporarily halted payments through several large banks. The German Savings Banks Association (DSGV) reported that payments worth around 10 billion euros (£8.6bn) were blocked due to PayPal's fraud-checking system failing [1].

PayPal confirmed the problem and stated that it had resolved the issue, with payments running normally again [1]. The DSGV noted that these incidents had significant effects on payment transactions across Europe, particularly in Germany. The supervisory authorities were also informed of the incidents at PayPal [1].

The technical issue underscored the importance of robust anti-fraud measures in the payment industry. PayPal aims to filter out scams before they reach banks through its security system, but it appears that the system failed on Monday, allowing unchecked direct debits to be sent to banks [1].

Despite the temporary disruption, analysts remain optimistic about PayPal's growth potential. The average target price for PayPal shares is $82.52, representing an 18.86% upside from the current price of $69.42 [2]. GuruFocus estimates suggest a notable upside of 26.13% [3].

In other recent news, PayPal reported its second-quarter earnings, exceeding expectations in headline revenue, transaction profit, and non-GAAP earnings per share. However, some analysts expressed concerns over transaction margins and a slowdown in branded online total payment volume growth [2].

References:
[1] https://www.bbc.com/news/articles/cj6y42jggdyo
[2] https://www.investing.com/news/analyst-ratings/paypal-stock-faces-temporary-disruption-in-germany-raymond-james-notes-93CH-4213165
[3] https://www.marketbeat.com/instant-alerts/filing-truvestments-capital-llc-purchases-9791-shares-of-paypal-holdings-inc-pypl-2025-08-27/