There seem to be more analysts pounding the table for PayPal (NASDAQ:PYPL) stock today than ever before.

The stock is pretty beaten down. PYPL stock is down 9% over the last year, 67% since the start of 2022, 25% over the last five years. There has been a small December rally, but the long-term chart still looks bearish. So, what’s behind the earnest pumping of PayPal stock?

The Optimists and PYPL Stock

Analysts are going into 2024 with big smiles on their faces. They see a “soft landing,” and a big boom in generative artificial intelligence taking tech to new heights.

This is true at PayPal as well. Alex Chriss, a former Intuit (NASDAQ:INTU) executive who became CEO this year, says PayPal is replacing passwords with easier-to-use Passkeys.

This means easier consumer checkouts, with small businesses taking a wider variety of payments. The process extends to package tracking. He says AI let PayPal drop “low quality customers” in Latin America and Asia, according to the latest earnings call.

Bullish analysts aren’t worried about the fall in accounts. They call PYPL stock dirt cheap, with a price to earnings ratio half that of payment rivals. They see the whole transaction group rising as the Federal Reserve looks to cut interest rates next year. Bulls also like PayPal’s balance sheet and Chriss’ new management team.

Then there’s Braintree. The parent of Venmo, acquired in 2013, now accounts for 30% of PayPal’s payment volume. It was originally a way to let merchants accept payments on mobile sites.

Now it’s at the heart of what Chriss calls his “flywheel” of success. Data from Braintree becomes insights that lower fraud and boost authorization rates, he says.

The Skeptics Abide

There remain skeptics, like our David Moadel. With 2024 shaping up to be a transitional year, expectations should be muted.

PayPal’s Venmo service just lost Amazon.Com (NASDAQ:AMZN) as a customer. The company is losing market share and e-commerce growth is slowing. Besides, Braintree is not a brand, but a generic service, easy to compete with.

PayPal was created in 1998 to cut transaction costs with a system that bypassed gatekeepers like Visa (NYSE:V) and MasterCard (NYSE:MA).

Since then, subsidiaries like Braintree have embedded PayPal deeply into the system it once despised. If you use Apple (NASDAQ:AAPL) Pay or Google (NASDAQ:GOOGL)(NASDAQ:GOOG) Pay, you’re on a PayPal competitor.

Then there’s crypto. PayPal has long had its own crypto wallet, which now includes its own branded stablecoin. Whether this is a good thing or a bad thing depends on how you feel about crypto.

The level of fraud in crypto, and the lack of a compelling reason to use it, makes me skeptical. Regulators are skeptical as well, and they’re investigating the stablecoin.

The Bottom Line on PYPL Stock

PayPal stock has been disappointing investors for years. Analysts keep expecting a breakout, but it never sticks.

Will this year be any different? PayPal rose to over $300 per share in the 2021 bull market. Despite the recent run-up it’s still trading close to its lows of the last five years. Other stocks hit by the 2022 bear have recovered.

If PayPal is valued like its competitors in payments, it’s a buy. But the names of those competitors are changing. The biggest story in payments today is the Cloud Czars’ efforts to disrupt it. That’s the big risk I see in PayPal for 2024.

As of this writing, Dana Blankenhorn had LONG positions in AMZN, AAPL, and GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.