Analysts remain cautious on PayPal as product roadmap event fails to attract investors By

(Updated - January 26,Is Forex Group Profitable? Make a withdrawal 2024 5:53 AM EST)

Shares of PayPal Holdings (NASDAQ:) fell 3.7% on Thursday following the updates during the company's innovations event.

PayPal introduced several product enhancements, namely six new innovations that it is piloting and bringing to the market in the current year.

These innovations aim to revolutionize commerce through artificial intelligence (AI)-driven personalization for both merchants and consumers, the company said.

"PayPal is on a mission to revolutionize commerce, globally, and today we are starting the next chapter," said Alex Chriss, President and CEO, PayPal.

"With nearly 400 million consumer accounts, and 35 million merchant accounts, PayPal handles transactions for about a quarter of the world's e-commerce transactions each year, but more importantly, shoppers trust PayPal to power their payments."

New innovations included a completely new PayPal checkout experience designed to significantly speed up the checkout process for consumers and enhance transaction conversion for merchants.

Another feature is Smart Receipts, which is designed to provide AI-personalized recommendations from merchants to encourage customer retention.

Elsewhere, a reinvented PayPal consumer app offers new ways for shoppers to earn cash back and additional incentives for using PayPal. Another update concerns PayPal’s Venmo, which will now offer enhanced business profiles.

Analysts at Jefferies said the stock fell as the "product roadmap fell short of the hyped-up billing."

"Many of the products/features presented were either a continuation of what was discussed at the June '23 investor event (e.g. biometric auth., the absence of which has been a driver of share loss), or are likely to be viewed skeptically as a potential growth driver (revamp of PayPal app)," the analysts said.

Analysts at Bernstein agree.

"While all these experiences are incremental, we don’t see how they transform the PayPal user experience and solve the biggest problem facing PayPal’s cash cow, the button — ‘why should users click on the button when there are many easier-to-use options?" the analysts said.

PYPL is down a further 0.6% in pre-open Friday.

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