PayPal (PYPL -2.07%) stock has fallen 65% in the past year, due in part to a series of unforced errors.

First, there was the rumored Pinterest acquisition that never materialized. Then, management had to scrap aggressive growth projections just one quarter after announcing them. More recently, a controversial $2,500 fine on users "spreading misinformation" drew widespread scrutiny. These stumbles can easily cause an investor to take their eye off the core business, but when looking closer at PayPal's most recent results, it's clear the company is still a mixed bag.

The red flag: Slowing user growth

User growth is the lifeblood of many companies. If it dries up, the company had better have a backup plan to extract more revenue from existing clients or reduce expenses.

PayPal's user base is still expanding, albeit at a slow 4% pace in the third quarter, marking the seventh consecutive quarter of slowing active accounts growth. Payment transactions per active account (for the trailing-12-month period) rose a solid 13% to 50.1. Increasing user engagement is essential, but growth for this metric has also been decelerating.

But in the meantime, PayPal is being proactive about increasing the reach of its platform.

The green flag: New relationships

During the latest earnings call, PayPal announced it will integrate with Apple Pay for greater tap-to-pay functionality with Apple devices while also allowing users to access their PayPal account anywhere Apple Pay is accepted starting in 2023. This partnership is likely to provide PayPal with an uptick in both user growth and payment transactions.

Additionally, Live Nation Entertainment signed an agreement with PayPal to utilize Braintree (owned by PayPal) to become their primary payment processor globally. The companies also expanded their marketing relationship for PayPal and Venmo at Live Nation's major music festivals.

Slowing growth but increasing cash flow

So while PayPal isn't the growth machine it was shaping up be early on during the pandemic, revenue still rose 11% year over year to $6.8 billion last quarter, while total payment volume was up 9% to $337.0 billion. And the company is focused on making its business more efficient as it generated $1.8 billion in free cash flow (26% margin), up 37% year over year.

From that perspective, PayPal trades at a pretty cheap 16 times free cash flow. And the company is using that free cash flow to aggressively repurchase shares with buybacks in 2022 expected to total about $4.2 billion against over $5.0 billion in free cash flow. Most of these repurchases are also making their way back to shareholders as PayPal's stock-based compensation was less than $1.4 billion over the past 12 months.

For the fourth quarter, management is guiding for 7% revenue growth, while its adjusted operating margin rises.

PayPal is no longer a growth stock as it would need to expand its user base along with existing customer relationships to retain that crown. Instead, as indicated by management's repurchase activity, PayPal can be seen as a value play.

I don't think PayPal is a screaming buy, but it's probably not worth selling the stock if you already own it. PayPal's turnaround story has a long way to go, and investors will need more information before reaching a final verdict on this stock.