Analysts have downgraded PayPal following a sharp post-earnings selloff, with shares plunging 20%. The primary concern revolves around the company's branded checkout, facing intensifying competition. Several analysts cited the declining relevance of PayPal's core e-commerce proposition as platforms like Apple Pay and Google Pay gain traction, impacting PayPal's market share.

Canaccord, HSBC, and Citizens analysts all lowered their ratings on PayPal stock. They point to a slowdown in branded checkout volumes, indicating a loss of market share. Specifically, analysts are worried about the company's ability to boost consumer and merchant engagement. They also cited the rise of competing platforms and the potential for a challenging turnaround.

HSBC reduced its earnings and free cash flow estimates. The analysts are hesitant that the company can stabilize branded checkout volumes. While BNPL is considered a bright spot, other growth drivers seem too small to offset the structural headwinds. Investors should watch future earnings reports for any signs of recovery in the branded checkout segment.

These downgrades reflect growing concerns about PayPal's ability to adapt to a changing payments landscape. The pressure on the checkout with PayPal button is evident as e-commerce shifts. The company needs to find its next chapter to stay competitive. The market is closely monitoring PayPal's strategic responses to these challenges.