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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on PYPL

Breaking News: PayPal Holdings Inc reported disappointing Q4 earnings, with revenue and EPS missing expectations. The company's 2026 outlook was also weak, citing operational challenges and a CEO transition. Despite this, one analyst maintains a Buy rating, citing a 15% free cash flow yield and asymmetric risk-reward. However, another analyst questions the stock's prospects, calling it a potential value trap. The earnings release led to a significant decline in the stock, with PayPal's growth faltering and future prospects looking grim. Analysts are cautious due to competitive pressures and execution risk.

1.c. Company Highlights

2. PayPal's 2025 Performance: A Mixed Bag

PayPal delivered a total payment volume of $1.8 trillion, with revenue growing 4% to $33.2 billion. Non-GAAP earnings per share increased 14% to $5.31, beating expectations. The company's Q4 performance was also solid, with total payment volume growing 9% to $475 billion, and transaction revenue growing 3% to $7.8 billion. The actual EPS for Q4 came out at $1.23, slightly lower than estimates of $1.29.

Publication Date: Feb -04

📋 Highlights
  • Venmo Revenue Growth: Venmo generated $1.7 billion in revenue, up 20% YoY, with 100 million active accounts and 14% average revenue per user growth.
  • Enterprise Payments Turnaround: Delivered 7 consecutive quarters of profitable growth and returned to double-digit volume growth in 2025.
  • BNPL TPV Surge: Buy now, pay later TPV exceeded $40 billion, reflecting over 20% YoY growth, outpacing most segments.
  • Branded Checkout Weakness: Online branded checkout TPV grew just 1% (currency-neutral), hindered by U.S. retail slowdowns and international challenges.
  • PSP Margin Expansion: The PSP business expanded margins YoY, with PayPal’s total payment volume reaching $1.8 trillion in 2025.

Segment Performance

The company's Venmo business continued to grow, with revenue reaching $1.7 billion, up 20% from the previous year. The Enterprise Payments business also turned around, delivering 7 consecutive quarters of profitable growth and a return to double-digit volume growth. However, online branded checkout TPV grew only 1% on a currency-neutral basis, due to U.S. retail weakness and international headwinds.

Guidance and Outlook

For 2026, PayPal expects low single-digit revenue growth, TM dollars to decline slightly or be roughly flat, and non-GAAP EPS to range from down low single digits to slightly positive. The company's guidance is more conservative than analyst estimates, which expect revenue growth of 6.2% next year.

Valuation

PayPal's current valuation metrics are as follows: P/E Ratio of 7.42, P/B Ratio of 1.92, P/S Ratio of 1.18, EV/EBITDA of 5.71, Dividend Yield of 0.34%, and Free Cash Flow Yield of 14.26%. The company's ROE is 25.87%, and ROIC is 14.95%. Given the current valuation, the market seems to be pricing in a relatively stable performance from the company.

Strategic Focus

The company is focusing on driving innovation, deepening engagement, strengthening infrastructure, and delivering sustainable growth. PayPal is also investing in presentment, experience, and rewards to strengthen its online branded checkout business. The company's diversified growth drivers, including Venmo, PSP, and buy now, pay later, give it resilience and flexibility.

Capital Allocation

PayPal returned $6 billion to shareholders through share repurchases and paid its first quarterly dividend. The company's Board is involved with the capital allocation strategy, and the focus is on executing on the integrated strategy to drive shareholder value. With a strong capital return profile, PayPal is well-positioned to deliver long-term value to its shareholders.

3. NewsRoom

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Ongoing Securities Investigation into PayPal Holdings, Inc. (PYPL) - Contact Levi & Korsinsky

05:16

Source: newsfilecorp.com

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Is PayPal an Underrated Financial Stock Investment Play?

Feb -07

Source: fool.com

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PayPal's Price Finally Fits (Rating Upgrade)

Feb -07

Source: seekingalpha.com

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Block vs. PayPal: Which Fintech Stock Is Better Positioned for 2026?

Feb -06

Source: fool.com

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PayPal: Buy The Dip, If You Want To Gamble

Feb -06

Source: seekingalpha.com

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PayPal Stock Has Never Been This Cheap: Can (Another) New CEO Turn It Around?

Feb -06

Source: fool.com

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How Low Can PayPal Stock Go?

Feb -06

Source: forbes.com

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Mission Wealth Management LP Cuts Stock Holdings in PayPal Holdings, Inc. $PYPL

Feb -06

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.90%)

6. Segments

Services to Financial Companies

Expected Growth: 5.9%

The expected growth rate is based on the global revenue growth hypothesis. The segment is likely to benefit from the increasing adoption of digital payments by financial institutions, which is driving the growth of PayPal's services to financial companies. As the global digital payment landscape continues to evolve, PayPal is well-positioned to capture a significant share of the growing market, thereby driving revenue growth in this segment.

7. Detailed Products

PayPal Payments Standard

A payment processing solution that allows businesses to accept online payments

PayPal Payments Pro

A payment processing solution that allows businesses to accept online payments and manage transactions

PayPal Here

A mobile payment processing solution that allows businesses to accept in-person payments

Venmo

A peer-to-peer payment service that allows individuals to send and receive money

Xoom

A digital money transfer service that allows individuals to send money internationally

PayPal Credit

A digital credit line that allows customers to pay for purchases over time

PayPal Working Capital

A financing solution that provides businesses with access to capital based on their PayPal sales history

PayPal Business Loans

A financing solution that provides businesses with access to capital for various business needs

8. PayPal Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

PayPal's services are highly specialized and there are limited substitutes available, reducing the threat of substitutes.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternative payment methods, PayPal's strong brand and large user base mitigate this power.

Bargaining Power Of Suppliers

PayPal has a diverse range of suppliers, including banks and payment processors, reducing the bargaining power of individual suppliers.

Threat Of New Entrants

While there are some barriers to entry, such as regulatory hurdles and the need for significant investment in technology and infrastructure, new entrants can still disrupt the market.

Intensity Of Rivalry

The digital payment industry is highly competitive, with many established players and new entrants vying for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 34.46%
Debt Cost 4.57%
Equity Weight 65.54%
Equity Cost 11.00%
WACC 8.79%
Leverage 52.58%

11. Quality Control: PayPal Holdings, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Discover

A-Score: 6.2/10

Value: 6.6

Growth: 7.8

Quality: 7.8

Yield: 3.0

Momentum: 7.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Visa

A-Score: 5.9/10

Value: 0.8

Growth: 7.8

Quality: 8.8

Yield: 1.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Amex

A-Score: 5.8/10

Value: 3.0

Growth: 6.3

Quality: 6.9

Yield: 2.0

Momentum: 8.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Nasdaq

A-Score: 5.6/10

Value: 1.8

Growth: 5.7

Quality: 7.0

Yield: 3.0

Momentum: 7.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Capital One

A-Score: 5.5/10

Value: 4.1

Growth: 6.3

Quality: 5.4

Yield: 3.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
PayPal

A-Score: 4.9/10

Value: 6.2

Growth: 7.6

Quality: 7.2

Yield: 0.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

40.42$

Current Price

40.42$

Potential

-0.00%

Expected Cash-Flows