PayPal Just Gained 11% in a Month. Michael Burry Still Calls It a “Fat Pitch”
PayPal (PYPL) stock rose 11% in the past month, driven by cost cuts and buybacks. Michael Burry reiterated his 'Fat Pitch' call, citing potential buyout value. Q3 revenue grew 2% to $8.58B, missing estimates, while EPS increased 8% to $1.45. Management raised its 2026 EPS guidance to ~$5.60. Burry also highlighted Fiserv (FISV) as a potential takeover target.
How this was made
The 30-second read
Why it matters
For traders, the actionable element is the combination of raised EPS guidance and the market’s focus on branded checkout growth as the limiting factor for further upside.
Market read
PayPal is positioned as a valuation-led, buyback-supported story after an earnings beat, but the article emphasizes weak revenue and branded-checkout growth as the constraint.
What to watch
The article flags EU duty exemption ending as a 70 bps drag; traders may also need to watch for further cross-border policy changes that could pressure branded checkout margins and growth.
Background
The piece frames PayPal’s recent rally around its Oct. 27 earnings beat, cost cuts, buybacks, and Michael Burry’s renewed bullish commentary.
Ticker impact
PayPal shares are up 11% in a month, with an Oct. 27 earnings beat and Burry calling it a “Fat Pitch” at $50s.
Likely modest upward bias as traders re-rate valuation, but follow-through may be limited if branded checkout growth remains low.
The article cites a profit beat, raised 2026 EPS guidance, and buybacks reducing share count, while also noting revenue growth of only 2% and branded checkout up just 1% currency-neutral.
Market effects
Reinforces the payments sector trade of valuing cost discipline and buybacks, while highlighting branded-checkout growth as the key swing factor.
Limited direct regional spillover; mainly affects US large-cap payments sentiment.
Mentions EU duty-exemption end as a headwind, underscoring cross-border regulatory/tariff sensitivity for payments merchants.
Counterpoint
The “cheap at 10x forward earnings” argument may be a value trap if branded checkout growth stays near 1% and revenue growth remains low.
Key entities
- companyPayPal
US-listed payments company whose stock performance and earnings/guidance details are discussed.
- personMichael Burry
Investor whose Substack commentary is cited as a sentiment catalyst.
- companyClayton Dubilier & Rice
Private equity firm reported to be in early talks to buy Global Payments, influencing Burry’s read-through to the payments space.
- companyGlobal Payments
Referenced in buyout reports that underpin Burry’s valuation framework for payments acquirers/targets.
- companyFiserv
Referenced as Burry’s preferred takeout candidate with an implied valuation range.
