PayPal Holdings (PYPL) AI Stock Analysis

• Market Cap: $37.77B
• Dividend Yield: N/A
• Average Volume (3M): 13.40M
• Price to Earnings (P/E): 7.7
• Beta (1Y): 1.19
• 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: 935,652,000
• 10 Day Avg. Volume: 16,705,385
• 30 Day Avg. Volume: 13,398,151
• PEG Ratio: 0.30
• Price to Book (P/B): 2.76
• Price to Sales (P/S): 1.69
• P/FCF Ratio: 10.06
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 1.21
• Enterprise Value/Gross Profit: 2.67
• Enterprise Value/Ebitda: 5.28
• 1Y Price Target: $52.41
• Price Target Upside: 27.74% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 35
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: $44.00 ▲(7.24% Upside)

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

Strong cash generation and free cash flow

PayPal's sustained FCF (TTM $5.6B) and operating cash flow (TTM $6.4B) provide durable internal funding for product investment, BNPL scale, and capital returns. This cash-generation profile supports strategic initiatives and buybacks without immediate reliance on new equity, improving long-term optionality.

Venmo and PSP monetization momentum

Robust Venmo growth and deeper monetization (higher TPV, card adoption and rising MAAs) show durable product-led revenue expansion. Combined with PSP/Enterprise pricing improvements and doubled processing yields, these trends strengthen PayPal's multi-product revenue mix and provide sustained upside beyond core checkout.

Manageable leverage and balance-sheet flexibility

Leverage remains moderate (debt-to-equity ~0.56) with a sizable equity base, giving PayPal capacity to fund receivables programs, commercial-paper access and opportunistic buybacks. This balance-sheet flexibility supports BNPL forward-flow arrangements and provides resilience during investment cycles.

Negative Factors

Branded checkout underperformance and concentration risk

Branded checkout contributes a majority of profit but shows materially weak TPV growth. Persistent underperformance in this high-profit segment can disproportionately depress margins and profitability over multiple quarters, making recovery timing a key determinant of long-term earnings power.

Execution and deployment shortcomings

Slower merchant adoption and heavier integration needs indicate execution gaps. Delays in biometric, presentment and BNPL rollout reduce expected conversion gains, raise integration OpEx, and push out revenue realization, weakening the ROI on recent product investments over the medium term.

Investment-driven headwinds and guidance uncertainty

Targeted growth investments that create several points of TM headwind, coupled with withdrawal of multi-year guidance, lower visibility into when investments will translate to margin expansion. This raises execution and timing risk for near-term TM dollars and EPS despite strategic intent.

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: Negative
• Last Price: 41.03
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• 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 41.03 is below the 20-day moving average (MA) of 54.57, below the 50-day MA of 58.21, and below the 200-day MA of 66.78, indicating a bearish trend. The MACD of -3.43 indicates Positive momentum. The RSI at 12.40 is Positive, neither overbought nor oversold. The STOCH value of 4.28 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
AXP	78 Outperform	$243.63B	22.73	33.76%	0.84%	8.14%	9.55%
MA	75 Outperform	$497.20B	33.34	210.49%	0.54%	15.67%	18.22%
XYZ	75 Outperform	$34.90B	11.56	14.78%	―	0.47%	178.05%
V	74 Outperform	$628.93B	31.17	53.44%	0.69%	11.34%	2.76%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
WU	67 Neutral	$3.14B	4.08	97.70%	10.18%	-2.51%	17.47%
PYPL	63 Neutral	$37.77B	7.71	25.73%	―	4.50%	19.71%

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.

PayPal Enters Receivables Purchase Agreement with Alps 2.0

On November 11, 2025, PayPal entered into a Receivables Purchase Agreement with Alps 2.0 Partners to sell up to €65 billion of UK and European buy now, pay later (BNPL) loan receivables. This agreement, expected to close in the fourth quarter of 2025, involves a forward-flow arrangement over a 28-month period, subject to certain conditions and eligibility criteria. Additionally, PayPal and KKR renewed their agreement, allowing KKR to purchase up to €65 billion of BNPL loan receivables originated by PayPal in Europe through March 2028. This partnership reflects PayPal’s strategic approach to balance sheet management and supports the growth of its BNPL portfolio in Europe.

The most recent analyst rating on (PYPL) stock is a Hold with a $70.00 price target. To see the full list of analyst forecasts on PayPal Holdings stock, see the PYPL Stock Forecast page.

PayPal Launches $5 Billion Commercial Paper Program

On November 14, 2025, PayPal Holdings, Inc. announced the establishment of a commercial paper program allowing the issuance of short-term, unsecured commercial paper notes up to $5 billion. The proceeds from these notes will be used for general corporate purposes, with a revolving credit facility serving as a liquidity backstop. The notes will be sold in the U.S. commercial paper market, with maturities not exceeding 397 days. As of the announcement date, no notes have been issued, and the program includes agreements with commercial paper dealers for the sale of these notes.

The most recent analyst rating on (PYPL) stock is a Hold with a $70.00 price target. To see the full list of analyst forecasts on PayPal Holdings stock, see the PYPL Stock Forecast page.