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PayPal Holdings (PYPL)
NASDAQ:PYPL
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PayPal Holdings (PYPL) AI Stock Analysis

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PYPL

PayPal Holdings

(NASDAQ:PYPL)

Rating:78Outperform
Price Target:
$78.00
▲(11.14% Upside)
PayPal's strong financial performance and positive earnings call sentiment are the most significant factors driving the score. The company's strategic initiatives and innovation in areas like Venmo and BNPL contribute positively, despite technical analysis showing mixed signals and valuation concerns due to the absence of a dividend yield.
Positive Factors
Financial Performance
PayPal delivered upside across essentially all metrics, which supports a bullish outlook on the stock.
Growth Potential
The transition to modern checkout is now 60% complete, which is expected to drive future growth and improve financial performance.
Product Innovation
Considering the backlog of product innovation and utility to be introduced to merchants and consumers, PayPal is seen as incrementally bullish.
Negative Factors
Branded Checkout Performance
The most pressing investor focus is in its core Branded checkout business which lagged more bullish Street expectations.
Investor Sentiment
The main sore spot arose from a lack of upside in online branded transactions and an implied slowdown in transaction margins, which affected investor sentiment negatively.
Market Competition
Neutral and bearish investors focus on long-term structural share loss concerns due to increasing competition from Apple Pay and Shop Pay.

PayPal Holdings (PYPL) vs. SPDR S&P 500 ETF (SPY)

PayPal Holdings Business Overview & Revenue Model

Company DescriptionPayPal Holdings, Inc. is a leading technology platform that enables digital payments and serves as a secure alternative to traditional financial transactions. Founded in 1998 and headquartered in San Jose, California, PayPal operates globally across various sectors, including e-commerce, mobile payments, and peer-to-peer transactions. Its core products include the PayPal digital wallet, PayPal Credit, and various merchant services that facilitate online payments for businesses of all sizes.
How the Company Makes MoneyPayPal generates revenue primarily through transaction fees charged to merchants and consumers for processing payments. The company has several key revenue streams, including: 1) Transaction Fees: PayPal earns a percentage of each transaction processed through its platform, with fees varying based on transaction volume and payment methods. 2) Merchant Services: PayPal offers services such as payment processing, invoicing, and subscription billing to businesses, which contribute significantly to its revenues. 3) Interest and Fees on Loans: Through its PayPal Credit and Working Capital offerings, PayPal earns interest income and fees from loans extended to consumers and businesses. 4) Partnerships and Collaborations: PayPal has established partnerships with major platforms and financial institutions, enhancing its payment solutions and expanding its user base. The company's strategic acquisitions and integrations, such as the purchase of Venmo and Braintree, have also played a vital role in diversifying its revenue streams and driving growth.

PayPal Holdings Key Performance Indicators (KPIs)

Any
Any
Active Accounts
Active Accounts
Monitors the number of active user accounts, reflecting customer engagement, market penetration, and potential for transaction growth.
Chart InsightsPayPal's active accounts have shown a gradual recovery since 2023, reflecting strategic initiatives like PayPal World and Pay with Crypto, which are expected to drive user engagement. Despite challenges from tariffs impacting Asian markets, the company's focus on Venmo and BNPL has fueled growth, with Venmo achieving its highest revenue growth rate since 2023. This suggests a potential for sustained user growth, although macroeconomic uncertainties and increased transaction losses remain areas to watch.
Data provided by:Main Street Data

PayPal Holdings Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q2-2025)
|
% Change Since: -10.28%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong profitable growth, innovation, and strategic expansion in several areas, notably Venmo, BNPL, and omnichannel strategies. However, there were some challenges related to tariff impacts and increased transaction losses. Overall, the positive aspects of the company's performance and strategic direction outweigh the challenges.
Q2-2025 Updates
Positive Updates
Profitable Growth and Strategic Transformation
PayPal reported its sixth consecutive quarter of profitable growth, with a non-GAAP earnings per share increase of 18% year-over-year. The company is successfully transforming from a payments company into a dynamic commerce platform.
Venmo's Impressive Performance
Venmo revenue grew by more than 20%, marking the highest revenue growth rate since 2023. Total Payment Volume (TPV) for Venmo grew 12%, and Pay with Venmo TPV was up more than 45% in the quarter.
Buy Now, Pay Later (BNPL) Growth
BNPL volume grew more than 20% in the second quarter, with monthly active accounts climbing 18%. Average order value for BNPL transactions is more than 80% higher than a standard branded checkout transaction.
Omnichannel Strategy Success
Debit card TPV across PayPal and Venmo grew more than 60%, and monthly active accounts grew more than 65%. The company launched a new physical card for PayPal Credit, enabling both online and in-store credit line access.
Expansion of PayPal World Platform
PayPal World aims to connect billions of users at scale with partnerships including major wallets like Mercado Pago, Tenpay Global, and UPI. This initiative will expand PayPal's reach to over 2 billion consumers worldwide.
Strong European Growth and Innovation
PayPal launched the first-ever contactless mobile NFC wallet on iOS and Android in Germany, with over 3 million enrollments. Venmo's college distribution deals enhanced brand visibility.
Negative Updates
Tariff Headwinds Impacting Growth
Branded online checkout TPV growth was impacted by tariffs, particularly in Chinese to U.S. corridors, which caused a slight deceleration.
Increased Transaction Losses
Transaction losses increased due to normalization in loss rates and new product introductions, with an expectation of an 8 basis point rate for the full year.
Potential Macroeconomic Uncertainties
The company continues to monitor macroeconomic uncertainties, including tariffs and trading frictions, which could impact global economic activity and spending.
Company Guidance
During PayPal's Second Quarter 2025 Earnings Conference Call, the company provided strong guidance, emphasizing continued profitable growth and transformation into a dynamic commerce platform. Key metrics included an 8% growth in transaction margin dollars, excluding interest on customer balances, and an 18% year-over-year increase in non-GAAP earnings per share. Total active and monthly active accounts grew by 2%, while transactions per active account, excluding PSP, rose by 4%. Branded experiences TPV saw an 8% currency-neutral growth, and Buy Now, Pay Later volumes increased by more than 20%. Venmo revenue grew over 20%, with TPV up 12%. PayPal also highlighted its strategic initiatives, including the rollout of PayPal World, increased adoption of Pay with Crypto, and the expansion of their omnichannel strategy, which saw debit card TPV growth of over 60%. The company expects transaction margin dollars to grow between 6% to 7% for the full year and raised its guidance for non-GAAP earnings per share to a range of $5.15 to $5.30, reflecting an 11% to 14% increase.

PayPal Holdings Financial Statement Overview

Summary
PayPal demonstrates robust financial health with strong revenue and profit growth, efficient cash flow management, and a solid balance sheet. The company shows effective cost management and profitability, although there are areas for improvement in equity and cash flow growth.
Income Statement
85
Very Positive
PayPal has demonstrated strong revenue growth with a TTM revenue of $32.29 billion, up from $31.80 billion in 2024, and $29.77 billion in 2023. The gross profit margin for TTM is 46.91%, indicating solid cost management. The net profit margin improved to 14.49% TTM from 13.04% in 2024, reflecting increased operational efficiency. EBIT and EBITDA margins are robust at 18.16% and 21.31% TTM, respectively, showing strong profitability. Overall, PayPal's income statement reflects consistent growth and high profitability, though the slight decline in gross profit from 2022 may warrant attention.
Balance Sheet
78
Positive
PayPal's balance sheet is strong with a debt-to-equity ratio of 0.56 TTM, indicating moderate leverage. The equity ratio is 25.33% TTM, showing a stable financial position. Return on equity (ROE) is 23.15% TTM, reflecting efficient use of equity to generate profits. While total liabilities are relatively high compared to equity, the company's strong asset base supports its financial stability. The slight decrease in stockholders' equity compared to 2023 suggests a need for continued equity management.
Cash Flow
82
Very Positive
PayPal's cash flow is strong with a TTM free cash flow of $5.29 billion, although slightly down from $6.77 billion in 2024. The operating cash flow to net income ratio stands at 1.30 TTM, indicating effective cash generation through operations. The free cash flow to net income ratio is 1.13 TTM, highlighting good cash conversion. The decline in free cash flow growth rate from 2024 suggests areas for improvement in capital efficiency.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue32.29B31.80B29.77B27.52B25.37B21.45B
Gross Profit15.15B14.66B13.70B13.77B14.00B11.78B
EBITDA7.26B6.74B6.83B4.99B5.60B6.46B
Net Income4.68B4.15B4.25B2.42B4.17B4.20B
Balance Sheet
Total Assets79.78B81.61B82.17B78.62B75.80B70.38B
Cash, Cash Equivalents and Short-Term Investments10.01B10.82B14.06B10.85B9.39B13.08B
Total Debt11.30B9.88B9.68B10.42B9.05B8.94B
Total Liabilities59.58B61.19B61.12B58.35B54.08B50.32B
Stockholders Equity20.20B20.42B21.05B20.27B21.73B20.02B
Cash Flow
Free Cash Flow5.29B6.77B4.22B5.11B4.89B5.35B
Operating Cash Flow6.07B7.45B4.84B5.81B5.80B6.22B
Investing Cash Flow1.58B1.59B752.00M-3.33B-5.15B-16.55B
Financing Cash Flow-8.29B-8.28B-2.99B-1.20B-557.00M12.45B

PayPal Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price70.18
Price Trends
50DMA
71.96
Negative
100DMA
69.89
Positive
200DMA
75.50
Negative
Market Momentum
MACD
-0.79
Negative
RSI
50.04
Neutral
STOCH
79.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PYPL, the sentiment is Positive. The current price of 70.18 is above the 20-day moving average (MA) of 68.74, below the 50-day MA of 71.96, and below the 200-day MA of 75.50, indicating a neutral trend. The MACD of -0.79 indicates Negative momentum. The RSI at 50.04 is Neutral, neither overbought nor oversold. The STOCH value of 79.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PYPL.

PayPal Holdings Risk Analysis

PayPal Holdings disclosed 30 risk factors in its most recent earnings report. PayPal Holdings reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

PayPal Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$536.27B40.40177.90%0.50%14.55%13.25%
80
Outperform
$674.39B34.5551.18%0.67%11.38%7.43%
78
Outperform
$66.38B14.8822.92%4.05%13.85%
77
Outperform
$219.76B22.4132.58%0.95%8.03%6.26%
76
Outperform
$7.27B10.8820.47%6.91%9.41%13.98%
72
Outperform
$2.80B3.28135.32%10.96%-3.83%62.05%
68
Neutral
$17.69B11.8210.30%3.73%9.66%0.42%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PYPL
PayPal Holdings
70.18
-1.41
-1.97%
AXP
American Express
320.60
68.31
27.08%
MA
Mastercard
591.61
119.34
25.27%
V
Visa
351.18
82.35
30.63%
WU
Western Union
8.44
-2.50
-22.85%
OMF
OneMain Holdings
61.15
15.95
35.29%

PayPal Holdings Corporate Events

Executive/Board Changes
PayPal Holdings Appoints Deirdre Stanley to Board
Neutral
Jun 24, 2025

On June 24, 2025, PayPal Holdings appointed Deirdre Stanley, former Executive Vice President and General Counsel of The Estée Lauder Companies, to its Board of Directors, expanding the Board from 11 to 12 members. She will also serve on the Corporate Governance and Nominating Committee and Risk and Compliance Committee. Additionally, effective June 23, 2025, PayPal’s Board reorganized its committee structure by disbanding the Audit, Risk and Compliance Committee and establishing two new committees: the Audit and Finance Committee and the Risk and Compliance Committee, to enhance oversight of financial and risk management practices.

Shareholder MeetingsBusiness Operations and Strategy
PayPal Stockholders Approve Key Proposals at Annual Meeting
Neutral
Jun 9, 2025

At the 2025 Annual Meeting of Stockholders held on June 5, PayPal Holdings‘ stockholders approved several key proposals, including the amendment and restatement of the 2015 Equity Incentive Award Plan, which increased the number of shares reserved for issuance by 15 million. Additionally, the stockholders elected 11 directors, approved executive compensation, and ratified the appointment of PricewaterhouseCoopers LLP as the independent auditor for 2025. However, proposals regarding charitable giving and reducing the threshold to call special meetings were not approved. These decisions reflect PayPal’s strategic focus on enhancing shareholder value and maintaining robust governance practices.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 23, 2025