In this podcast, Motley Fool contributors Travis Hoium, Lou Whiteman, and Rachel Warren discuss:
- Potential buyers for PayPal.
- Axon earnings.
- Cava earnings.
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A full transcript is below.
This podcast was recorded on Feb. 25, 2026.
Travis Hoium: Who is adding PayPal to their checkout cart? Motley Fool Money starts now. Welcome to Motley Fool Money. I'm Travis Hoium joined today by Rachel Warren and Lou Whiteman. Guys, the big talk of the market this week is PayPal, which has been in this strange zone of value stock, can't seem to get its shares going anywhere. They have changed CEOs. But now there's talk that they may be acquired by someone, may put themselves on the block. Lou, does this make sense for somebody else to buy them, and who possibly could actually pull off a deal and not destroy their own business in the process?
Lou Whiteman: First thing we need to make clear is PayPal is not a distressed asset, period. The business is healthy, the business is fine. The issue is, it's a low growth business. Shares are off 84% from their all time highs. Some of that was COVID hysterica. The company is profitable, cash generation is strong. Share count is down 20% plus over the last five years. That is not a distressed asset. When I first saw these reports, my thought was private equity. Everything I just said, this is an ideal scenario to take a company private, use those cash flows to pay down the debt, and also get out of this quarter to quarter spotlight of when will you grow, which I think would help this business? We'll see what's going on here. One thing I think, though, is that PayPal is not on the block.
Travis Hoium: They haven't put themselves up for sale?
Lou Whiteman: I don't believe that. I think that the market, that that opportunistic potential acquirers are looking at that drop and realizing everything I said is true, that this is not a distressed asset, and maybe we can do a deal here. We can talk in a second about rumored buyers, potential buyers. To me, someone like Silverlake Partners makes a ton of sense on the private equity side. You know, even there was talk of Adyen, the European payments company, which, just of give them everything they need in the US and build on their strengths elsewhere. I think that if PayPal did go on the block, there'd be a lot of at least people wanting to look at it, but we'll see where this goes.
Travis Hoium: Rachel, what are you thinking when you hear a company like PayPal, it has been in valued territory. One of the options is to just keep buying back shares. They could buy somewhere between 10-15% of shares outstanding pretty easily each year. But does a sale maybe make more sense?
Rachel Warren: I think it's possible, and I agree with Lou. This is not a distressed business. I do think there's an argument to be made. This is a really undervalued business, as it's trading right now. You know, shares are down about 40% over the last 12 months, about 80-85% from their 2021 peak. You look at how the company's market cap has fallen to about 43 billion, it does make a full takeover more feasible for potential mega cap suitors. You have to think about the really strategically valuable assets that PayPal could bring to the table if they were acquired. You've got Venmo, they're widely recognized as the most pristine asset for PayPal with high growth, about 20% annually. There's a lot of popularity among younger demographics. PayPal operates one of only four globally recognized payment networks. They process nearly 2 trillion in annual transaction volume. You've got the Braintree business, that's the unbranded processing business for large corporate clients. That could be really attractive to a potential buyer. Even the incoming CEO, Enrique Lores, he has a history of breaking up complex businesses. There's been some speculation that maybe he was even brought in to lead a sale or major structural overhaul. So I do think this talk makes sense. We're going to have to see if it's more than just rumors, but it is something that I think is intriguing and perhaps makes more sense for the business than, say, four or five years ago.
Travis Hoium: Lou Stripe was one of the names that has come up this week. They're still private, but there's a lot of hype behind Stripe. They're very highly valued, I think, $159-ish billion valuation, whereas PayPal is profitable and only has about a 40, $45 billion valuation. Strategically would Stripe make any sense? Then if we want to open the can of worms, how in the world would they pull off a deal?
Lou Whiteman: Yeah, the valuation is really interesting. I'd love to know that in the time of a deal, whether or not PayPal's shareholders would agree with that valuation.
Travis Hoium: When you are in private markets, you're not being marked every day the way that PayPal is, so it's very possible that their market clearing price is more like $60 billion.
Lou Whiteman: Yeah, the great thing about the public markets is that all of the buyers, all of the sellers, the sheer mass of people, that's how you get to price discovery. So yeah, but that's neither here nor there. Look, Stripe is a really, really good business. They have been a great success. But this will be an interesting deal for a couple of reasons. For one, I don't know what anti trust would think of this. I think it probably gets through with regulators, but I don't think they would like it. Secondly, Stripe has made its mark as being the agnostic rails for payments for them to basically get into competition with a lot of their customers, I don't know how that would go over or what that would do. Again, opportunistic is so important here. This is how Stripe could go public. That would be a really, really complicated deal. I think it would be easier for them to just raise gobs and gobs of cash, maybe through debt and then do an offering afterwards. So I am personally dismissive of the idea of, like, a reverse merger to take Stripe public. But look, again, how much of this is Stripe actually saying we need to buy this and how much of this is just seeing a decent asset marked down and just saying, hmm, that's interesting. That's my question.
Travis Hoium: Yeah, Rachel, what do you think? Does Stripe make any sense as a buyer? It's fun to talk about, but every time I think through it, lose weight. They are the Switzerland. They're very much a digital company. PayPal is trying to move more into the physical world in a lot of different ways. So I don't know, there could be pluses and minuses.
Rachel Warren: I do think it could make sense. The important thing to remember is Stripe is really dominant in business to business and merchant infrastructure, but they really lack a direct consumer brand, which, of course, that's something that PayPal could provide. For a long time, Stripe has really been known as the digital bridge. They allow businesses to accept payments over the internet and in person. They handle that really complex technical and banking infrastructure. They processed about 1.9 trillion in total payment volume in 2025. That was up about 34% year over year. It's a really, really robust business. Obviously, there's a valuation gap. They're reportedly valued about four times greater than what we currently see PayPal's valuation at. Another thing that's interesting is both Stripe and PayPal have been moving much more deeply into crypto rail. So you could see how merger could maybe create a dominant global stable coin player. That's something that I think there might be some interest in. There's also this idea that Stripe might only target very specific units, like Venmo, for example, to gain a consumer wallet or brain tree to scale their merchant processing business. I think right now this is a lot of speculation. Lou did a good job of outlining the different ways this could go. I do think it's very possible that we could look at this deal as maybe acting as a mechanism for Stripe to go public, and that would allow the combined entity to trade, of course, on stock exchange, which is something we have seen a lot of rumors for years that Stripe is going to IPO and has reportedly kept delaying that. So I think there's a lot more questions and answers right now. I do think, though, that if, in fact, Stripe is interested in buying PayPal, it does pose an intriguing opportunity. This is something that I think we're going to want to watch closely.
Lou Whiteman: I'm going to make a bold prediction here, and that's that nothing is going to happen. There's nothing more bold than say nothing, but look, PayPal's board just changed the CEO. They put out an investor deck saying, there's 100 ways for us to grow. Now, I think that if you have 100 ways, it probably means you don't have one. So I'm not going to take that as face value. But this is not a company that is saying, you know what? Let's fire the CEO, bring in a new CEO with a plan, and also put ourselves for sale. This is someone being opportunistic, seeking to get a deal. The funny thing here is that if you buy that premise that the board is not looking to sell, the only way to change their mind is to maybe get rid of the opportunistic part of it by significantly overpaying. I think that PayPal's destiny is to be acquired one day. I don't think it's going to be in 2026, but I could be wrong.
Rachel Warren: If it's not acquired, maybe this 17% pop that we've had over the last week is going to fade away. But we'll see what happens, definitely something we'll be covering for a while here on Motley Fool Money. When we come back, we are going to talk about Exxon's blowout quarter. You're listening to Motley Fool Money.
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Travis Hoium: Welcome back to Motley Fool Money. Rachel, I got to be honest, Exxon is a stock that I've held since sometime late in 2014 or early 2015, my biggest holding for a very long time. I've trimmed, and yet they continue performing so well that it continues to be in that top spot. That happened again last night. Shares are up 20% in early trading on Wednesday after another just crazy good quarter. What did you see from the quarter from Exxon?
Rachel Warren: Exxon's Q4 results, it was really a master class and the continued shift that they're executing from being this hardware first company as they've been known to a high margin software and AI Powerhouse. The headline numbers were incredibly impressive. Revenue hit 797 million. That was up 39% year over year. Handily beat Wall Street's estimates, adjusted earnings per share of $2.15 way above the 1.60 estimate that Wall Street was looking They had a record $7.4 billion in annual bookings. It's a 46% jump, and I think it shows just how much demand is growing for their ecosystem. Really important to note, as well, their AI era plan that they have been continuing to implement, which is all about embedding practical, high impact AI capabilities across their hardware and software ecosystem, it seems to already be proving its worth. I mean, that accounted for about 750 million in bookings in its first full year. Software revenue was up about 40% year over year. Their net revenue retention hit 125%. So existing customers, they aren't just staying. They're spending significantly more on those premium tools. I think it's hard not to be bullish on how Rick Smith and the team are executing this. They're targeting now $6 billion in revenue by 2028, they had a backlog of about 14 billion of contracted revenue at the end of the year. It's really a fantastic company, and seeing how they're really redefining their entire product category with AI, something that's not particularly easy to do, I think it's been pretty impressive.
Travis Hoium: Lou, what'd you take from the quarter?
Lou Whiteman: I was wrong here, I have to admit. I'm also a shareholder. I like the business long term, but I really was worried about this quarter. They had a rough time last quarter, and it just felt like sky high expectations plus a tough environment for local government spending. That might just mean growth wouldn't pan out, and obviously, that didn't happen. The $14 billion backlog of future business, what really stood out to me more than just kind of numbers. It's possible that why I was wrong is that in a tight budget environment, tools that allow you to do more with your same personnel that that is compelling enough. Is this a great business? This is still a work in progress. I might push back on that that it's just a fantastic business. There's tons of CapEx. If you look at the net income relative to revenue for a company that's been around this long, almost 800 million in revenue, and they can only generate three million in net income. That's not what you want to see long term. I'm going to give them a pass for that now because they are building something. A ton of stock based compensation here, still trading at 60 time future earnings. To me, this is the definition of a hold and not a buy here. I'm like I'm glad I'm in where I am. I don't find this as like, Wow, this is the best opportunity to throw new money for me. But there is no reason to hit the exit, either.
Travis Hoium: Lou, one of the things that I remember writing a lot about years ago was, you don't want to worry too much about that bottom line because they're in growth mode. But now they're a premature business, almost $800 million in revenue for the quarter. That story was starting to change. If you look back at the chart, I mean, $135 million in net income a year ago. So we were starting to push on that operating leverage. But now that's gone backwards, is that OK if you have 38% growth in the quarter, or is that still something to worry about long term? Is that they're not actually going to translate this revenue growth to bottom line success?
Lou Whiteman: That's glass half empty. Glass half full is they still see enough worth investing in that they are still in investment and growth mode. I tend to give them the benefit of the doubt because they've done so well over the years, but look, it's a thing until it isn't? At some point, they do need to just be able to turn all of that revenue growth into oversized profits. I don't think the market should be demanding it today. I get the response, but it's just something, I think, for a long term shareholder to watch.
Travis Hoium: This is another interesting story of how businesses can just change over time. Rick Smith sold a vast majority of his shares when the company was still Taser International, and then he got after Elon Musk did that huge stock compensation package, they basically copied the exact same package for Exxon, and he has done very well, it has worked out very well for investors, but just always an interesting wrinkle to the Exxon story. When we come back, we are going to get Lou's thoughts on his favorite restaurant, Cava. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I am still waiting for Lou to take me to Cava at some point, because we don't have it in the Minneapolis area. But this is one of those companies that continues to perform really well. Rachel, what did we learn from Cava this quarter?
Rachel Warren: They are doing a really good job of, I think, scaling into a really sustainable growth enterprise. They officially crossed the $1 billion annual revenue milestone, which is a big deal. The fourth quarter featured a 21% revenue increase. They significantly outperform Wall Street's expectations here. Even though top line growth was strong, though, same restaurant sales grew less than 1%. So a lot of the growth they're seeing is being driven by changes like higher menu prices and product mix. We actually saw the guest traffic decline by about 1.4%. There was a roughly 100 basis point drop in restaurant level profit margin as well, but still about 21%, which is pretty solid for a business in their sector. Now, they're still maintaining their aggressive 2026 outlook. They're looking to open anywhere from 74, 76 new stores. They're looking for a rebound in same store sales growth of up to 5%. They're in an interesting spot. They're clearly kind of this I brand and fast casual. They're facing that same consumer reality that the Chipotles of the world are. People are sometimes spending more per visit, but the dip in traffic suggests at least some fatigue and frequent visits. They're leaning into some menu shifts. They're launching this exclusive invite only loyalty tier. I think we've got a high growth story here. There's obviously some visible near term headwinds from the Macro environment, but they have zero debt. They're still aiming for 1,000 stores by 2032. I like the business. I think it was a solid quarter and a great year for the company.
Lou Whiteman: So, Travis, I'm happy to have a Cava ball with you, but obviously, I'm cheap, so I'm going to try and get you to pay, just for the record here. Like Rachel said, this quarter was about pricing power. The slight uptick in same store sales, judging on the curve of a lot of the rest of the industry, that's pretty good. But it was a 1.9% increase in menu price and product mix, not that people are coming more. This is an interesting moment for them. We talked about Exxon, talk about this. This is still a relatively small company. They just crossed $1 billion in revenue. They're only in 26 states. There's massive potential if Travis's part of the world, we'll eat Mediterranean rice bowls, which we'll see.
Travis Hoium: I'll give it a shot.
Lou Whiteman: It's really good, and it's a lot healthier than some of the other stuff that people are eating, but that's neither here nor there. Rachel was saying, that it's all coming from new restaurants, but that is a path for success here. They're going to open 75 restaurants in 2026. In theory, they can grow at that pace into the 2030s just to hit their target of 1,000 locations. Again, they're only in 26 states, so there is places to go. If they can grow at that pace and have flat same store sales, it's at least probably good enough. The other thing I'd say is that the market reaction here, whatever we're talking about, quarterly reports are often more about expectations going in than the actual results. Cava has been cut in half since the beginning of 2025. Rivals are having trouble. There is saturation there. The macro picture from here is cloudy. You don't need to be a Wow quarter all the time. In this environment, good enough is good enough, and this is almost as delicious as a Mediterranean bull.
Travis Hoium: To put their growth potential into a little bit of context, they could almost 10X the number of restaurants that they have, and they still wouldn't pass Chipotle. There's a lot of growth on runway potential here for Cava. Hopefully, they will make it to the upper Midwest one of these days. As always, people on the program may have interest in the stocks they talk about and the Motley Pool may have formal recommendations for or against, so I'll buy or sell stocks based solely on what you hear. All personal finance content follows the Motley Pool's editorial standards, and it's not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our Show Max. For Rou Whiteman, Rachel Warren, and Dan Boyd behind the glass. I'm Travis Hoium. Thanks for listening to Motley Fool Money. We'll see you here tomorrow.
