One-glance verdict
Undervalued
$100.56 our estimate vs market $57.87
Wall Street consensus: $58.31 (-42.0% lower than our fair-value estimate)
42% below our estimate, below the bear case
Fundamentals snapshot
PayPal Holdings, Inc.
PYPL · NMS · Financial Services · Credit Services
Current price
$57.87
52-week range
$38.46 - $79.22
Market cap
$49.51B
Balance sheet
Healthy
14.50x Strong cushion
Net debt $2.96B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 1.7% last year.
- Reward Returns 24.5% on equity, ahead of 25% of its peers.
- Reward Free cash flow was positive in 10/10 years.
What this company does
PayPal Holdings, Inc.
PayPal is a technology company that allows people and businesses to send and receive money digitally through popular apps like PayPal and Venmo. It makes money primarily by charging a small fee on these transactions, so its success depends on how many people use its services and the total amount of money they move. The company's value comes from its large, trusted network that connects millions of buyers and sellers around the world.
How the company got here
Founded in 1998 as Confinity, the company we now know as PayPal started with the goal of creating a digital payment platform. It merged with Elon Musk's online bank X.com in 2000 and went public in early 2002. Later that year, online auction giant eBay bought PayPal for $1.5 billion, making it the site's official payment provider and fueling its massive growth. In 2015, PayPal spun off from eBay to become an independent company again, acquiring other payment platforms like Venmo and Braintree over the years to expand its reach.
What it actually does
PayPal operates a global technology platform that allows people and businesses to make and receive digital payments. You can think of it as a digital wallet that connects to your bank account or credit card, letting you pay for things online without sharing your financial details with every merchant. The company also owns other popular payment services you might recognize, such as the peer-to-peer payment app Venmo and the international money transfer service Xoom. In addition to online payments, PayPal offers in-store payment solutions, credit products, and even allows users to buy and sell cryptocurrencies.
Transaction Revenues
This is PayPal's main way of making money, accounting for the vast majority of its income. The company charges merchants a small percentage fee, plus a fixed amount, for each payment they process through its platform. These fees apply whether you're paying with your PayPal balance, a linked bank account, or a credit card. PayPal also earns transaction fees when users send money internationally, convert currencies, or make instant transfers to their bank accounts.
Other Value-Added Services
This is a smaller but growing part of PayPal's business. It includes revenue from a variety of other services beyond simple payment processing. For example, PayPal earns interest on the balances that users hold in their accounts, similar to how a bank earns interest on deposits. This segment also includes fees from partnerships, subscription fees for business tools, and interest and fees from its credit products, like business loans and a 'buy now, pay later' option for consumers.
What management is betting on now
Under its new leadership, PayPal is focused on accelerating its growth and becoming a technology-focused company again. A key priority is to improve the experience for consumers, believing that more engaged users will lead to better results for merchants. The company is also investing heavily in artificial intelligence (AI) to personalize the shopping experience and create new services, such as 'agentic commerce,' where AI assistants could make purchases on a user's behalf. Finally, management is reorganizing the company into three distinct business units—Checkout, Consumer Financial Services (including Venmo), and Payment Services—to simplify operations and increase accountability.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$1.37B
FY2024 Q3
$1.45B
FY2024 Q4
$2.19B
FY2025 Q1
$964.00M
FY2025 Q2
$692.00M
FY2025 Q3
$1.72B
FY2025 Q4
$2.19B
FY2026 Q1
$903.00M
Revenue
$8.35B
Net income
$1.11B
Diluted EPS
1.21
Operating cash flow
$1.13B
Free cash flow
$903.00M
Fetching…
Sources
Revenue
$8.68B
Net income
$1.44B
Diluted EPS
1.53
Operating cash flow
$2.38B
Free cash flow
$2.19B
Fetching…
Sources
Revenue
$8.42B
Net income
$1.25B
Diluted EPS
1.30
Operating cash flow
$1.97B
Free cash flow
$1.72B
Fetching…
Sources
Revenue
$8.29B
Net income
$1.26B
Diluted EPS
1.29
Operating cash flow
$898.00M
Free cash flow
$692.00M
Fetching…
Sources
Revenue
$7.79B
Net income
$1.29B
Diluted EPS
1.29
Operating cash flow
$1.16B
Free cash flow
$964.00M
Fetching…
Sources
Revenue
$8.37B
Net income
$1.12B
Diluted EPS
1.09
Operating cash flow
$2.39B
Free cash flow
$2.19B
Fetching…
Sources
Revenue
$7.85B
Net income
$1.01B
Diluted EPS
0.99
Operating cash flow
$1.61B
Free cash flow
$1.45B
Fetching…
Sources
Revenue
$7.88B
Net income
$1.13B
Diluted EPS
1.08
Operating cash flow
$1.52B
Free cash flow
$1.37B
Fetching…
Sources
Is it cheap or expensive?
Fair value $100.56 vs current price $57.87
Wall Street consensus is the average analyst price target: $58.31 (-42.0% lower than our fair-value estimate).
Our most-likely fair value is $100.56 a share — about 73.8% above today's price of $57.87, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net debt $3.0B. Interest coverage 14.5x.
Net debt
$2.96B
Interest coverage
14.50x
PayPal Holdings, Inc.'s profit covers its interest bill about 14.5 times over. which is stronger than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
PYPL
BASELINE
PayPal Holdings, Inc.
Total debt $14.22B Interest coverage 14.50x This is the baseline the peer rows are being compared against.
Total debt $23.86B Interest coverage 45.09x +211% vs PYPL Carries about 3.1x more debt cushion than PYPL.
Total debt $24.64B Interest coverage 27.03x +86% vs PYPL Carries about 1.9x more debt cushion than PYPL.
Total debt $23.59B Interest coverage 2.27x -84% vs PYPL Carries about 6.4x less debt cushion than PYPL.
What you should know
The case for and against PYPL
3 Rewards
0 Risks
Rewards
-
Revenue grew 1.7% last year.
-
Returns 24.5% on equity, ahead of 25% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
10.94x
Forward P/E
9.99x
P/B
2.52x
P/S
1.45x
EV/EBITDA
8.13x
PEG ratio
1.05x
Profitability
How much profit each dollar creates
Gross margin
40.5%
Operating margin
17.0%
Net margin
14.4%
ROE
24.5%
ROA
4.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.72x
Current ratio
1.29x
Quick ratio
0.25x
Total debt
$14.22B
Total cash
$11.26B
Growth
How the business has been compounding
Revenue TTM
$33.73B
Revenue 5Y CAGR
6.9%
EPS TTM
5.29
EPS 5Y CAGR
37.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$6.39B
Free CF TTM
$5.56B
FCF margin
16.5%
Dividend
Shareholder payout
Yield
1.0%
Payout ratio
7.9%
Last ex-div date
2026-09-04