PayPal Holdings (PYPL) AI Stock Analysis

• Market Cap: $42.70B
• Dividend Yield: N/A
• Average Volume (3M): 30.67M
• Price to Earnings (P/E): 10.7
• Beta (1Y): 1.20
• Revenue Growth: 4.50%
• EPS Growth: 19.71%
• Country: US
• Employees: 24,400
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 1.23
• Shares Outstanding: 920,664,550
• 10 Day Avg. Volume: 35,214,794
• 30 Day Avg. Volume: 30,665,200
• PEG Ratio: 0.30
• Price to Book (P/B): 2.76
• Price to Sales (P/S): 1.68
• P/FCF Ratio: 10.06
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 1.37
• Enterprise Value/Gross Profit: 3.02
• Enterprise Value/Ebitda: 5.98
• 1Y Price Target: $51.08
• Price Target Upside: 9.26% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 35
• EPS Forecast (FY): 5.32
• Revenue Forecast (FY): $34.11B

• Rating: 63 Neutral
• Price Target: $49.00 ▲(4.81% Upside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

Overall score reflects solid fundamentals and attractive valuation, but is held back by very weak technical momentum and a mixed near-term outlook from the earnings call, where branded checkout underperformance and investment-driven headwinds create uncertainty despite strong Venmo/PSP/BNPL progress and healthy free-cash-flow expectations.

Positive Factors

Venmo monetization & user growth

Sustained MAA growth and strong Venmo revenue demonstrate durable network effects that shift more consumer spending onto PayPal's platform. Higher Pay-with-Venmo TPV and card usage create recurring merchant payment volume and diversified fee streams, supporting longer-term revenue and margin expansion as engagement converts to monetization.

Enterprise Payments / PSP improvement

Consistent double-digit enterprise volume growth and materially higher processing yields reflect improved pricing power and stronger value-added product adoption. Durable commercial relationships and platform integration raise take rates and support sustainable margin improvement, less tied to consumer cyclicality and more to sticky merchant economics.

Cash generation & capital returns

Robust free cash flow and large buybacks plus a healthy cash balance provide durable financial flexibility to fund investments, dividends and opportunistic returns. Manageable leverage supports strategic options and reduces refinancing pressure, enabling multi-year product and market investments without immediate balance-sheet strain.

Negative Factors

Branded checkout underperformance

Branded checkout contributes the majority of profit, so prolonged single-digit TPV growth indicates a core profitability vulnerability. Weak merchant adoption and presentment mean a large portion of PayPal's earnings depends on a recovery that management expects to be multiyear, creating structural risk to margins and cash generation until fixed.

Execution & deployment weaknesses

Recurring integration friction and slower-than-planned rollouts raise implementation costs and delay revenue capture from product improvements. Persistent execution gaps can necessitate sustained incremental OpEx and partner support, slowing scale of new features and reducing the pace at which conversion gains translate into durable margin improvement.

Guidance withdrawal & investment headwinds

Withdrawing multi-year guidance and signaling investment-driven headwinds increases uncertainty about trajectory and timing of a durable recovery. Planned investments that reduce near-term TM growth imply a longer payback horizon and make forecasting free cash flow and margin expansion less reliable over the next several years.

PayPal Holdings Business Overview & Revenue Model

Company Description

PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company's payments platform allows consumers to send and receive payments in approximately 200 markets and in approximately 100 currencies, withdraw funds to their bank accounts in 56 currencies, and hold balances in their PayPal accounts in 25 currencies. PayPal Holdings, Inc. was founded in 1998 and is headquartered in San Jose, California.

How the Company Makes Money

PayPal generates revenue through multiple streams, primarily from transaction fees charged to merchants for processing payments. When a consumer makes a purchase using PayPal, the company collects a percentage of the transaction amount along with a fixed fee, which varies by country and transaction size. Additionally, PayPal earns income from value-added services such as PayPal Credit, where it charges interest on financed purchases. The company also profits from its partnerships with other financial institutions and ecommerce platforms, as well as from its acquisition of companies like Venmo and Braintree, which expand its user base and service offerings. Furthermore, PayPal's growing ecosystem, which includes subscription services and promotional offers, contributes to its diverse revenue model.

PayPal Holdings Financial Statement Overview

Summary

Fundamentals are solid overall: revenue is growing (TTM $33.2B vs. $31.8B in 2024), profitability is healthy (~46.8% gross margin, ~15% net margin), ROE is strong (~24%), and free cash flow is meaningful ($5.6B). Offsets include margin compression vs. 2020–2021 peaks and some near-term cash flow softness/volatility versus 2024 (OCF down to $6.4B from $7.45B).

Income Statement

TTM (Trailing-Twelve-Months) revenue is $33.2B, up from $31.8B in 2024, showing continued top-line expansion. Profitability is solid with a ~46.8% gross margin and ~15.0% net margin in TTM, and earnings improved versus 2024 (net income $5.2B vs. $4.1B). However, the trajectory over the full period is mixed: margins are below the 2020–2021 highs, and the reported TTM revenue growth figure (0.943) appears inconsistent with the recent annual pattern, adding some uncertainty around the growth read-through.

Balance Sheet

Leverage looks manageable with TTM debt-to-equity at ~0.56 and total debt around $10.0B against $20.3B of equity, supporting financial flexibility. Returns are strong, with TTM return on equity at ~24%, improving from ~20% in 2023–2024. The main watch-out is that leverage has ticked up versus 2023–2024 (debt-to-equity ~0.46–0.48), and total assets have been relatively stable rather than compounding, implying less balance-sheet-driven growth.

Cash Flow

Cash generation is healthy: TTM operating cash flow is $6.4B and free cash flow is $5.6B, with free cash flow covering ~87% of net income—generally good earnings quality. That said, free cash flow declined slightly in TTM (about -1.8%) after a very strong 2024 level, and operating cash flow is down from 2024 ($7.45B), pointing to some near-term cash conversion volatility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	33.34B	31.80B	29.77B	27.52B	25.37B
Gross Profit	15.68B	14.66B	13.70B	13.77B	14.00B
EBITDA	7.70B	6.74B	6.83B	4.99B	5.60B
Net Income	5.23B	4.15B	4.25B	2.42B	4.17B
Balance Sheet
Total Assets	80.17B	81.61B	82.17B	78.62B	75.80B
Cash, Cash Equivalents and Short-Term Investments	10.42B	10.82B	14.06B	10.85B	9.39B
Total Debt	9.99B	9.88B	9.68B	10.42B	9.05B
Total Liabilities	59.92B	61.19B	61.12B	58.35B	54.08B
Stockholders Equity	20.26B	20.42B	21.05B	20.27B	21.73B
Cash Flow
Free Cash Flow	5.56B	6.77B	4.22B	5.11B	4.89B
Operating Cash Flow	6.42B	7.45B	4.84B	5.81B	5.80B
Investing Cash Flow	797.00M	1.59B	752.00M	-3.33B	-5.15B
Financing Cash Flow	-5.96B	-8.28B	-2.99B	-1.20B	-557.00M

PayPal Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 46.75
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PYPL, the sentiment is Neutral. The current price of 46.75 is above the 20-day moving average (MA) of 42.79, below the 50-day MA of 51.09, and below the 200-day MA of 64.29, indicating a neutral trend. The MACD of -1.18 indicates Negative momentum. The RSI at 51.00 is Neutral, neither overbought nor oversold. The STOCH value of 70.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PYPL.

PayPal Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
V	77 Outperform	$610.82B	28.66	53.44%	0.69%	11.34%	2.76%
MA	74 Outperform	$467.60B	31.53	210.49%	0.54%	15.67%	18.22%
AXP	68 Neutral	$213.68B	23.86	33.76%	0.84%	8.14%	9.55%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
WU	64 Neutral	$3.00B	6.09	51.86%	10.18%	-2.51%	17.47%
PYPL	63 Neutral	$42.70B	10.70	25.73%	―	4.50%	19.71%
XYZ	62 Neutral	$37.68B	30.56	6.01%	―	0.47%	178.05%

PayPal Holdings Corporate Events

PayPal appoints Enrique Lores as new CEO

On February 3, 2026, PayPal announced that its board has appointed longtime director and current board chair Enrique Lores as President and CEO, effective March 1, 2026, replacing Alex Chriss, with Chief Financial and Operating Officer Jamie Miller serving as interim CEO during the transition. The board also named David W. Dorman as independent board chair, underscoring a leadership reset driven by the directors’ view that the pace of change and execution over the past two years had lagged expectations; by bringing in Lores, a veteran of HP Inc. known for leading complex transformations and expanding into new services and AI-enabled offerings, PayPal aims to accelerate innovation, sharpen operational discipline, and reinforce its competitive position in a rapidly evolving payments landscape, while acknowledging Chriss’s contributions in monetizing Venmo, growing the BNPL business, and modernizing the platform.

The most recent analyst rating on (PYPL) stock is a Buy with a $58.00 price target. To see the full list of analyst forecasts on PayPal Holdings stock, see the PYPL Stock Forecast page.