PayPal Holdings (PYPL) AI Stock Analysis

• Market Cap: $57.74B
• Dividend Yield: N/A
• Average Volume (3M): 12.38M
• Price to Earnings (P/E): 14.6
• Beta (1Y): 1.40
• Revenue Growth: 7.10%
• EPS Growth: 4.45%
• Country: US
• Employees: 24,400
• Sector: Financial
• Sector Strength: 78
• Industry: Financial - Credit Services
• EPS (TTM): 4.00
• Shares Outstanding: 989,242,430
• 10 Day Avg. Volume: 11,673,804
• 30 Day Avg. Volume: 12,380,079
• PEG Ratio: 3.28
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.18
• Price to Cash Flow (P/CF): 7.30
• P/FCF Ratio: 7.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $91.65
• Price Target Upside: 57.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 30

PayPal's strong financial performance and strategic growth initiatives are key drivers of its stock score. While technical indicators suggest caution due to bearish trends, the company's robust cash flow and strategic corporate events support a positive outlook. Valuation remains reasonable, balancing the risks and opportunities for investors.

Positive Factors

Business Transformation

PayPal plans to transform from just a payments company to a commerce company by leveraging its vast data and AI to create a personalized shopping experience.

Growth Potential

Guidance contemplates >20% BNPL and >40% Pay with Venmo CAGRs, which indicates potential for strong growth.

Technological Advancements

PayPal is driving meaningfully improved conversion with the newest checkout integration, currently at 30% of US merchants, with plans to increase to 80% coverage by 2027.

Negative Factors

Conservative Guidance

PYPL's CEO emphasized a 'prudent' and 'cautious' guidance philosophy, which may lead to conservative estimates.

Market Concerns

Concerns about continued share loss create risk of further multiple compression, even on in line or better performance.

PayPal Holdings Business Overview & Revenue Model

Company Description

PayPal Holdings, Inc. is a leading technology platform company that facilitates digital and mobile payments on behalf of consumers and merchants worldwide. Operating in the financial technology sector, PayPal provides a wide range of services, including online money transfers, digital wallet services, and payment processing solutions. Its core products allow individuals and businesses to make and receive payments through various channels, including online, mobile, and in-person transactions. With a global presence, PayPal serves millions of active account holders, offering them a convenient, secure, and efficient payment experience.

How the Company Makes Money

PayPal makes money primarily through transaction fees, which are charged to merchants when consumers use PayPal to make purchases. These fees vary based on the transaction's size and location, as well as the payment method used. In addition to transaction fees, PayPal also earns revenue from interest and fees on its credit products, such as PayPal Credit and Working Capital loans, which are offered to both consumers and merchants. Furthermore, the company generates income from value-added services, including subscription fees, referral agreements, and partnerships with financial institutions that expand its service offerings. Strategic acquisitions and partnerships, such as those with Venmo and Braintree, also contribute to PayPal's revenue by broadening its market reach and enhancing its product capabilities.

PayPal Holdings Financial Statement Overview

Summary

PayPal demonstrates strong revenue growth and solid cash flow generation, despite a slight decline in net income and return on equity. The company's prudent leverage supports stability, making PayPal financially robust.

Income Statement

PayPal has demonstrated steady revenue growth, with a 6.8% increase from 2023 to 2024. The company maintains a solid gross profit margin of 46.1% and an EBIT margin of 16.7% for 2024. However, the net profit margin slightly decreased to 13.0%, indicating some pressure on net profitability. Overall, PayPal shows strong revenue growth and solid operating margins.

Balance Sheet

PayPal's balance sheet reflects a moderate debt-to-equity ratio of 0.48, indicating prudent leverage usage. The equity ratio stands at 25.0%, showing a stable capital structure. ROE decreased slightly to 20.3%, reflecting stable profit generation from equity. Overall, the balance sheet remains strong, though there is a slight decline in equity returns.

Cash Flow

The company achieved impressive free cash flow growth of 60.3% from 2023 to 2024, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is 1.80, indicating efficient cash conversion from earnings. Additionally, the free cash flow to net income ratio of 1.63 further underscores strong cash flow performance. PayPal exhibits robust cash flow metrics, supporting its financial flexibility.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
31.80B	29.77B	27.52B	25.37B	21.45B
	Gross Profit
14.66B	13.70B	13.77B	14.00B	11.78B
	EBIT
5.33B	5.03B	3.84B	4.26B	3.29B
	EBITDA
6.74B	6.83B	4.99B	5.60B	6.46B
	Net Income Common Stockholders
4.15B	4.25B	2.42B	4.17B	4.20B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.82B	14.06B	10.85B	9.50B	13.08B
	Total Assets
81.61B	82.17B	78.72B	75.80B	70.38B
	Total Debt
9.88B	9.68B	10.42B	9.05B	8.94B
	Net Debt
3.32B	595.00M	2.64B	3.85B	4.14B
	Total Liabilities
61.19B	61.12B	58.44B	54.08B	50.32B
	Stockholders Equity
20.42B	21.05B	20.27B	21.73B	20.02B
Cash Flow		Free Cash Flow
6.77B	4.22B	5.11B	4.89B	5.35B
	Operating Cash Flow
7.45B	4.84B	5.81B	5.80B	6.22B
	Investing Cash Flow
1.59B	752.00M	-3.42B	-5.15B	-16.55B
	Financing Cash Flow
-8.28B	-2.99B	-1.20B	-557.00M	12.45B

PayPal Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 58.37
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PYPL, the sentiment is Negative. The current price of 58.37 is below the 20-day moving average (MA) of 67.67, below the 50-day MA of 73.87, and below the 200-day MA of 75.31, indicating a bearish trend. The MACD of -2.14 indicates Negative momentum. The RSI at 35.67 is Neutral, neither overbought nor oversold. The STOCH value of 19.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PYPL.

PayPal Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
V	84 Outperform	$611.72B	31.99	50.51%	0.71%	10.35%	16.40%
MA	76 Outperform	$446.53B	35.27	191.95%	0.56%	12.07%	17.27%
PYPL	74 Outperform	$57.74B	14.60	20.00%	―	7.10%	4.45%
AXP	71 Outperform	$163.84B	16.67	34.47%	1.20%	10.12%	24.93%
WU	69 Neutral	$3.39B	3.70	129.04%	9.28%	-3.38%	63.33%
SOFI	64 Neutral	$10.49B	25.05	8.26%	―	29.33%	―
Sector *	63 Neutral	$12.86B	9.17	9.14%	4.78%	16.41%	-10.11%

PayPal Holdings Corporate Events

PayPal Appoints Joy Chik to Board of Directors

On March 10, 2025, PayPal Holdings appointed Joy Chik, President of Identity and Network Access at Microsoft, to its Board of Directors, expanding the board from 11 to 12 members. Chik, with over 26 years of corporate and board experience, is expected to contribute significantly to PayPal’s strategic shift from a payments platform to a full-stack commerce API, leveraging her expertise in AI, identity, and security to drive growth and innovation.

PayPal Appoints Jamie Miller as CFO/COO

On February 25, 2025, PayPal announced the appointment of Jamie Miller as Chief Financial and Operating Officer, coinciding with its Investor Day event. During the event, PayPal reaffirmed its 2025 financial guidance and introduced a strategic growth outlook through 2027, including the launch of PayPal Open, a unified merchant platform, and expanded partnerships with Verifone and J.P. Morgan Payments to enhance its global commerce capabilities.

PayPal Announces Executive Departure and Transition Plan

On January 20, 2025, PayPal announced the upcoming departure of John Kim, its Executive Vice President and Chief Product Officer, effective March 31, 2025. Under a Separation Agreement, Kim will receive severance pay, bonuses, and benefits due to a ‘Qualifying Termination,’ ensuring a smooth transition for the company and its stakeholders.