PayPal Holdings (PYPL) AI Stock Analysis

• Market Cap: $66.55B
• Dividend Yield: N/A
• Average Volume (3M): 14.63M
• Price to Earnings (P/E): 14.9
• Beta (1Y): 1.25
• Revenue Growth: 4.05%
• EPS Growth: 13.85%
• Country: US
• Employees: 24,400
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 1.40
• Shares Outstanding: 955,378,400
• 10 Day Avg. Volume: 13,239,349
• 30 Day Avg. Volume: 14,627,211
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 2.32
• Enterprise Value/Gross Profit: 4.94
• Enterprise Value/Ebitda: 10.30
• 1Y Price Target: $80.60
• Price Target Upside: 15.52% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 28

• Rating: 79 Outperform
• Price Target: $80.00 ▲(14.66% Upside)

PayPal's strong financial performance and positive earnings call are the most significant factors driving the score. The company's strategic initiatives and innovation in areas like Venmo and BNPL support its growth trajectory. Technical analysis and valuation provide a balanced view, with mixed signals and reasonable valuation. The absence of corporate events does not impact the score.

Positive Factors

Strategic Expansion

The launch of PayPal World aims to connect billions of users globally, enhancing PayPal's market position and user base, supporting long-term growth.

Venmo Growth

Venmo's significant revenue growth and increased TPV reflect strong consumer adoption and brand strength, contributing to sustained revenue growth.

Omnichannel Strategy

The success of the omnichannel strategy, with significant TPV growth, indicates effective market penetration and diversification of revenue streams.

Negative Factors

Increased Transaction Losses

Rising transaction losses could pressure margins and profitability, potentially impacting long-term financial performance if not managed effectively.

Tariff Headwinds

Tariff-related challenges, particularly in key corridors, may hinder growth in international transactions, affecting revenue potential.

Macroeconomic Uncertainties

Ongoing macroeconomic uncertainties could impact consumer spending and global economic activity, posing risks to PayPal's growth trajectory.

PayPal Holdings Business Overview & Revenue Model

Company Description

PayPal 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 Money

PayPal 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 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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	32.29B	31.80B	29.77B	27.52B	25.37B	21.45B
Gross Profit	15.15B	14.66B	13.70B	13.77B	14.00B	11.78B
EBITDA	7.26B	6.74B	6.83B	4.99B	5.60B	6.46B
Net Income	4.68B	4.15B	4.25B	2.42B	4.17B	4.20B
Balance Sheet
Total Assets	79.78B	81.61B	82.17B	78.62B	75.80B	70.38B
Cash, Cash Equivalents and Short-Term Investments	10.01B	10.82B	14.06B	10.85B	9.39B	13.08B
Total Debt	11.30B	9.88B	9.68B	10.42B	9.05B	8.94B
Total Liabilities	59.58B	61.19B	61.12B	58.35B	54.08B	50.32B
Stockholders Equity	20.20B	20.42B	21.05B	20.27B	21.73B	20.02B
Cash Flow
Free Cash Flow	5.29B	6.77B	4.22B	5.11B	4.89B	5.35B
Operating Cash Flow	6.07B	7.45B	4.84B	5.81B	5.80B	6.22B
Investing Cash Flow	1.58B	1.59B	752.00M	-3.33B	-5.15B	-16.55B
Financing Cash Flow	-8.29B	-8.28B	-2.99B	-1.20B	-557.00M	12.45B

PayPal Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 69.77
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 69.77 is below the 20-day moving average (MA) of 69.77, above the 50-day MA of 68.92, and below the 200-day MA of 71.69, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 51.39 is Neutral, neither overbought nor oversold. The STOCH value of 58.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PYPL.

PayPal Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MA	84 Outperform	$518.60B	38.70	177.90%	0.53%	14.55%	13.25%
V	82 Outperform	$666.53B	34.15	51.18%	0.68%	11.38%	7.43%
AXP	81 Outperform	$246.31B	24.01	33.70%	0.88%	8.14%	9.55%
PYPL	79 Outperform	$66.55B	14.94	22.92%	―	4.05%	13.85%
XYZ	71 Outperform	$48.49B	17.01	14.27%	―	1.41%	262.31%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
WU	65 Neutral	$2.90B	3.90	97.70%	10.48%	-2.45%	17.47%

PayPal Holdings Corporate Events

PayPal’s Strong Q2 2025 Results and Raised Outlook

PayPal Holdings, Inc. is a leading financial technology company that facilitates digital and mobile payments worldwide, offering services through its PayPal and Venmo platforms, among others, to both consumers and merchants. In its second quarter of 2025, PayPal reported robust financial results, highlighted by a 5% increase in net revenues to $8.3 billion and a significant rise in earnings per share, reflecting the company’s strategic initiatives and market expansion. Key performance indicators for PayPal included a 6% increase in total payment volume to $443.5 billion and a 7% growth in transaction margin dollars to $3.8 billion, alongside improvements in operating income and margins. The company also returned $1.5 billion to shareholders through stock repurchases. Looking ahead, PayPal has raised its full-year guidance, indicating confidence in continued growth driven by innovations and strategic transformations in its business model.

PayPal Earnings Call Highlights Growth Amid Challenges

The recent earnings call for PayPal Holdings, Inc. was marked by a positive sentiment, highlighting strong performance in key areas such as Venmo, Buy Now, Pay Later (BNPL), and the launch of new initiatives like PayPal World and Pay with Crypto. These developments indicate significant growth potential for the company. However, challenges from tariffs and increased transaction losses were noted as areas of concern that could impact future performance.