PayPal Holdings (PYPL) AI Stock Analysis

• Market Cap: $41.82B
• Dividend Yield: N/A
• Average Volume (3M): 31.04M
• Price to Earnings (P/E): 10.7
• 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: 920,664,550
• 10 Day Avg. Volume: 16,802,034
• 30 Day Avg. Volume: 31,039,906
• 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: 1.06
• Enterprise Value/Revenue: 1.34
• Enterprise Value/Gross Profit: 2.87
• Enterprise Value/Ebitda: 5.77
• 1Y Price Target: $50.71
• Price Target Upside: 11.65% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 34
• EPS Forecast (FY): 5.31
• Revenue Forecast (FY): $34.14B

• Rating: 63 Neutral
• Price Target: $49.00 ▲(7.88% 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

Strong cash generation

Sustained free cash flow near $5–6B provides durable financial flexibility to fund product investment, BNPL partnerships, and share repurchases while cushioning downturns. High FCF coverage of earnings supports capital allocation without heavy reliance on new debt, aiding long-term strategy execution.

Diversified revenue & healthy margins

Broad revenue base across PayPal, Venmo, PSP, BNPL and value-added services with solid gross and net margins underpins steady profitability. Strong ROE indicates efficient capital use, reducing dependence on episodic gains and supporting sustainable earnings generation over multiple quarters.

Venmo monetization & product-led conversion

Rising Venmo adoption and product improvements increase everyday commerce capture and merchant checkout conversion. These structural gains expand a monetizable user base and shift mix toward higher-value transactions, supporting medium-term revenue and take-rate resilience independent of single-channel swings.

Negative Factors

Branded checkout underperformance

Weakness in branded checkout is structurally significant because it constitutes a majority of profit dollars; prolonged underperformance reduces core transaction margins and profits. Recovery timing is uncertain, making revenue and profit scalability dependent on multi-quarter execution improvements.

Execution and deployment shortcomings

Slower merchant integration and incomplete feature rollouts hinder product adoption and raise implementation costs. Persistent execution gaps can slow merchant conversion, compress take-rates, and lengthen payback periods on platform investments, weakening growth durability until resolved.

Guidance reset and near-term investment headwinds

Withdrawing multi-year guidance signals increased uncertainty and a planned near-term tradeoff: management is prioritizing investments that will weigh on transaction-dollar growth and margins. This reduces visibility on medium-term returns and may delay realization of scale benefits from new initiatives.

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 primarily makes money by charging fees for processing payment transactions and providing payment-related services to merchants and consumers. Its core revenue is transaction-based: when a customer pays a merchant using PayPal-branded checkout or when a merchant routes card and alternative payment methods through PayPal-owned processing (notably Braintree), PayPal earns fees that generally vary based on factors such as transaction type, payment method, geography, and whether currency conversion is involved. PayPal also earns revenue from value-added services and other payment activities, including cross-border and foreign-exchange related fees when it performs currency conversion, fees associated with certain commercial payment products and merchant services, and fees from remittance services (e.g., Xoom) where applicable. Venmo contributes through monetization of commerce and payment activity on its network (such as merchant acceptance/checkout and related fees) rather than only person-to-person transfers, which are typically not the primary direct fee driver. Additionally, PayPal can generate revenue from interest and other income tied to customer balances and certain credit-related or financial products where offered, though the availability and scale of these components can vary over time and by program. Significant partnerships and integration points that support earnings include relationships with merchants and marketplaces, platform and e-commerce integrations (including through Braintree), and arrangements with card networks and issuing banks that enable PayPal to fund and settle transactions; these partnerships help drive payment volume, user adoption, and merchant acceptance, which in turn underpin PayPal’s transaction-fee 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	33.17B	31.80B	29.77B	27.52B	25.37B
Gross Profit	15.46B	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	1.69B	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: 45.42
• 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 45.42 is above the 20-day moving average (MA) of 44.95, below the 50-day MA of 48.92, and below the 200-day MA of 63.27, indicating a neutral trend. The MACD of -0.61 indicates Negative momentum. The RSI at 47.22 is Neutral, neither overbought nor oversold. The STOCH value of 17.80 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	77 Outperform	$591.07B	28.66	54.22%	0.69%	11.34%	2.76%
MA	74 Outperform	$453.49B	31.53	198.42%	0.54%	15.67%	18.22%
AXP	68 Neutral	$204.75B	23.86	33.49%	0.84%	8.14%	9.55%
WU	68 Neutral	$2.97B	6.09	53.92%	10.18%	-2.51%	17.47%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
PYPL	63 Neutral	$41.82B	10.70	25.87%	―	4.50%	19.71%
XYZ	62 Neutral	$35.86B	30.56	5.91%	―	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.