One-glance verdict
Undervalued
$107.43 our estimate vs market $53.19
Wall Street consensus: $56.92 (-47.0% lower than our fair-value estimate)
50% below our estimate, below the bear case
Fundamentals snapshot
PayPal Holdings, Inc.
PYPL · NMS · Financial Services · Credit Services
Current price
$53.19
52-week range
$38.46 - $79.22
Market cap
$45.50B
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 digital payments company that helps people and businesses send and receive money through its apps, including its main PayPal service and Venmo. The company makes money by taking a small fee from these transactions, so its success depends on having more people and stores use its platform for their spending.
How the company got here
Founded in 1998 as Confinity, the company launched its online payment service, PayPal, a year later. It quickly became popular on eBay, an online auction site, for its ease of sending money digitally. After merging with Elon Musk's X.com and going public, eBay acquired PayPal in 2002 for $1.5 billion. In 2015, PayPal was spun off from eBay to become an independent company again, allowing it to expand its services beyond the auction site.
What it actually does
PayPal operates a technology platform that allows people and businesses to send and receive money for online purchases, personal transfers, and other commercial transactions. You can link your bank account, debit card, or credit card to your PayPal account to make payments. The company also owns other popular payment services you might recognize, such as the mobile payment app Venmo and the international money transfer service Xoom.
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 of each transaction, plus a fixed fee, when a customer pays for goods or services using PayPal. These fees vary depending on the transaction amount and whether it's a domestic or international payment. For consumers, sending money to friends and family from a linked bank account or PayPal balance is generally free.
Other Value-Added Services
This is a smaller but growing part of PayPal's business. It includes revenue from a variety of services beyond basic payment processing. This segment makes money from interest and fees on its credit products, like PayPal Credit, and from partnerships and referral fees. It also earns interest on the money that users hold in their PayPal and Venmo accounts.
Braintree
Braintree is a payment gateway owned by PayPal that allows online and mobile businesses to accept various payment methods, including credit and debit cards, PayPal, and digital wallets like Apple Pay and Google Pay. It's designed for developers and larger e-commerce companies that want more control over their checkout experience. Braintree makes money by charging merchants a fee for each transaction processed through its platform.
Venmo
Venmo is a popular mobile app, owned by PayPal, that lets you easily send money to and receive money from friends. While basic peer-to-peer transfers from a bank account or Venmo balance are free, Venmo makes money in several ways. It charges a fee for instant transfers to a bank account, for payments made with a credit card, and when users make purchases from businesses using their Venmo account. Venmo also earns money from interchange fees (a small percentage of a transaction paid by the merchant's bank to the card-issuing bank) when you use the Venmo debit or credit card.
Xoom
Xoom is a PayPal service focused on international money transfers. It allows people in countries like the U.S. and Canada to send money to family and friends in over 160 countries. Recipients can receive the money in their bank account, as cash at a pickup location, or in a mobile wallet. Xoom makes money by charging transaction fees and from the currency exchange spread (the difference between the rate at which they buy and sell foreign currency).
What management is betting on now
PayPal's current strategy focuses on several key areas to drive growth. The company is working to improve its core branded checkout experience to make it even more seamless for customers. They are also focused on expanding the services offered through Venmo to make it a broader financial tool. Additionally, PayPal is investing in using artificial intelligence (AI) to enhance its services and is looking to expand its international presence, particularly in emerging markets.
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 $107.43 vs current price $53.19
Wall Street consensus is the average analyst price target: $56.92 (-47.0% lower than our fair-value estimate).
Our most-likely fair value is $107.43 a share — about 102.0% above today's price of $53.19, 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 $23.56B 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)
10.31x
Forward P/E
9.19x
P/B
2.31x
P/S
1.33x
EV/EBITDA
7.49x
PEG ratio
0.93x
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
5.16
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
1.1%
Payout ratio
7.9%
Last ex-div date
2026-09-04