PayPal Holdings (PYPL) AI Stock Analysis

• Market Cap: $56.01B
• Dividend Yield: N/A
• Average Volume (3M): 15.95M
• Price to Earnings (P/E): 11.9
• 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): 1.34
• Shares Outstanding: 935,652,000
• 10 Day Avg. Volume: 18,325,575
• 30 Day Avg. Volume: 15,945,505
• PEG Ratio: 4.53
• Price to Book (P/B): 4.30
• Price to Sales (P/S): 2.76
• P/FCF Ratio: 12.98
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 2.00
• Enterprise Value/Gross Profit: 4.28
• Enterprise Value/Ebitda: 8.86
• 1Y Price Target: $77.43
• Price Target Upside: 30.33% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 31
• EPS Forecast (FY): 5.36
• Revenue Forecast (FY): $33.31B

• Rating: 76 Outperform
• Price Target: $70.00 ▲(17.83% Upside)

PayPal's strong financial performance and positive earnings call guidance are the most significant factors driving the score. The technical analysis presents some caution due to bearish trends, but the valuation suggests potential upside. Strategic initiatives and a focus on profitable growth position PayPal well for future success, despite macroeconomic challenges.

Positive Factors

Strategic Partnerships

The partnership with Logicbroker enhances PayPal's agentic commerce services, expanding merchant reach and integration with AI shopping channels, which can drive long-term growth.

Revenue Growth

Accelerating revenue growth indicates effective execution of strategic initiatives, enhancing PayPal's market position and supporting sustained financial health.

Cash Flow Generation

Strong cash flow generation provides PayPal with the flexibility to invest in growth opportunities, manage debt, and return capital to shareholders, supporting long-term stability.

Negative Factors

Regulatory Challenges

Regulatory scrutiny on BNPL services could lead to increased compliance costs and operational challenges, potentially impacting PayPal's growth in this segment.

Macro-Economic Headwinds

Macroeconomic headwinds may dampen consumer spending, affecting PayPal's transaction volumes and revenue growth in the near to medium term.

Increased Transaction Losses

Rising transaction losses can erode profit margins and indicate potential weaknesses in risk management, impacting long-term profitability.

PayPal Holdings Business Overview & Revenue Model

Company Description

PayPal Holdings, Inc. is a leading technology platform that enables digital and mobile payments on behalf of consumers and merchants worldwide. Founded in 1998 and headquartered in San Jose, California, PayPal operates across various sectors including e-commerce, financial technology, and digital wallets. Its core products and services include online payment processing, person-to-person money transfers, and mobile payment solutions. The company also offers additional services such as PayPal Credit, which provides financing options, and Braintree, which supports payment processing for businesses.

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

PayPal exhibits strong financial health with consistent revenue growth and profitability. The balance sheet is stable with manageable leverage, and cash flow generation remains robust. Minor operational cost pressures are present, but the company is well-positioned for continued growth.

Income Statement

PayPal has shown consistent revenue growth with a TTM increase of 1.77% and a strong gross profit margin of 46.76%. The net profit margin has improved to 14.96% in the TTM, indicating enhanced profitability. However, the EBIT margin has slightly decreased from the previous year, suggesting some operational cost pressures.

Balance Sheet

The company's debt-to-equity ratio is stable at 0.56, reflecting a balanced approach to leverage. Return on equity is strong at 24.26%, indicating efficient use of equity to generate profits. The equity ratio stands at 25.31%, showing a solid equity base relative to total assets.

Cash Flow

PayPal's free cash flow has grown by 5.16% in the TTM, demonstrating robust cash generation capabilities. The operating cash flow to net income ratio is 1.31, indicating strong cash conversion. However, the free cash flow to net income ratio has slightly decreased, suggesting a need for careful cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	32.86B	31.80B	29.77B	27.52B	25.37B	21.45B
Gross Profit	15.37B	14.66B	13.70B	13.77B	14.00B	11.78B
EBITDA	7.42B	6.74B	6.83B	4.99B	5.60B	6.46B
Net Income	4.92B	4.15B	4.25B	2.42B	4.17B	4.20B
Balance Sheet
Total Assets	79.80B	81.61B	82.17B	78.62B	75.80B	70.38B
Cash, Cash Equivalents and Short-Term Investments	10.76B	10.82B	14.06B	10.85B	9.39B	13.08B
Total Debt	11.28B	9.88B	9.68B	10.42B	9.05B	8.94B
Total Liabilities	59.60B	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	5.57B	6.77B	4.22B	5.11B	4.89B	5.35B
Operating Cash Flow	6.43B	7.45B	4.84B	5.81B	5.80B	6.22B
Investing Cash Flow	3.55B	1.59B	752.00M	-3.33B	-5.15B	-16.55B
Financing Cash Flow	-7.59B	-8.28B	-2.99B	-1.20B	-557.00M	12.45B

PayPal Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 59.41
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 59.41 is below the 20-day moving average (MA) of 61.18, below the 50-day MA of 64.26, and below the 200-day MA of 68.10, indicating a bearish trend. The MACD of -1.18 indicates Negative momentum. The RSI at 37.77 is Neutral, neither overbought nor oversold. The STOCH value of 22.22 is Neutral, 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	80 Outperform	$262.35B	25.66	33.70%	0.84%	8.14%	9.55%
PYPL	76 Outperform	$56.01B	11.92	24.36%	―	4.50%	19.71%
MA	75 Outperform	$516.98B	36.86	185.74%	0.54%	15.67%	18.22%
XYZ	72 Outperform	$39.59B	13.07	14.78%	―	0.47%	178.05%
V	70 Outperform	$673.28B	34.99	51.54%	0.69%	11.34%	2.76%
WU	69 Neutral	$2.96B	4.01	97.70%	10.10%	-2.51%	17.47%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

PayPal Holdings Corporate Events

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.

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.

PayPal Announces Quarterly Cash Dividend Program

On October 28, 2025, PayPal announced the initiation of a quarterly cash dividend program, with the first dividend of $0.14 per share payable on December 10, 2025. This move highlights PayPal’s strategy to return capital to shareholders while continuing to invest in growth. The company reported strong financial results for the third quarter of 2025, with a 7% increase in net revenues and a 32% rise in GAAP EPS. PayPal also raised its full-year guidance, indicating confidence in its ongoing growth and strategic partnerships with companies like Google and OpenAI.