PayPal Holdings (PYPL) AI Stock Analysis

• Market Cap: $70.33B
• Dividend Yield: N/A
• Average Volume (3M): 11.13M
• Price to Earnings (P/E): 16.3
• Beta (1Y): 1.32
• Revenue Growth: 4.50%
• EPS Growth: 12.82%
• Country: US
• Employees: 24,400
• Sector: Financial
• Sector Strength: 82
• Industry: Financial - Credit Services
• EPS (TTM): 1.33
• Shares Outstanding: 972,532,840
• 10 Day Avg. Volume: 8,761,044
• 30 Day Avg. Volume: 11,125,592
• PEG Ratio: 1.28
• Price to Book (P/B): 3.42
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.45
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 0.57
• Enterprise Value/Gross Profit: 5.00
• Enterprise Value/Ebitda: 2.72
• 1Y Price Target: $82.48
• Price Target Upside: 15.12% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 33

• Rating: 76 Outperform
• Price Target: $82.00 ▲( 14.45% Upside)

PayPal's stock score reflects strong financial performance and strategic positioning, highlighted by solid revenue growth, profitability, and cash flow management. Technical indicators show upward momentum, although caution is warranted due to nearing overbought conditions. The valuation remains fair, while strategic advancements and guidance stability amid macroeconomic uncertainties support a positive outlook.

Positive Factors

Business Initiatives

Q1 marked another quarter of steady progress in PayPal's business realignment with new CEO Alex Chriss at the helm for a little over a year now.

Financial Performance

PayPal is poised to deliver durable low-teens EPS compounding and strong free cash flow.

Product Adoption

BNPL/Pay Later adoption is gaining traction, with users transacting 17% more and spending 33% more on average.

Negative Factors

Growth Concerns

There is concern about results from the rollout of new branded experiences taking time to translate into TPV acceleration and PYPL's growth in U.S. online checkout.

Market Competition

PayPal is at a competitive disadvantage to other digital wallets and payment service providers, lacking a differentiated unified commerce offering.

Valuation Constraints

The long-term trade-off between Braintree share and margin limits the company's total addressable market and constrains valuation.

PayPal Holdings Business Overview & Revenue Model

Company Description

PayPal Holdings, Inc. is a leading technology platform company that facilitates digital and mobile payments on behalf of consumers and merchants worldwide. Operating in the financial technology sector, PayPal provides a wide range of services, including online money transfers, digital wallet services, and payment processing solutions. Its core products allow individuals and businesses to make and receive payments through various channels, including online, mobile, and in-person transactions. With a global presence, PayPal serves millions of active account holders, offering them a convenient, secure, and efficient payment experience.

How the Company Makes Money

PayPal makes money primarily through transaction fees, which are charged to merchants when consumers use PayPal to make purchases. These fees vary based on the transaction's size and location, as well as the payment method used. In addition to transaction fees, PayPal also earns revenue from interest and fees on its credit products, such as PayPal Credit and Working Capital loans, which are offered to both consumers and merchants. Furthermore, the company generates income from value-added services, including subscription fees, referral agreements, and partnerships with financial institutions that expand its service offerings. Strategic acquisitions and partnerships, such as those with Venmo and Braintree, also contribute to PayPal's revenue by broadening its market reach and enhancing its product capabilities.

PayPal Holdings Financial Statement Overview

Summary

PayPal maintains a strong financial position with robust profitability and efficient cash flow generation, supported by a balanced capital structure. The consistent revenue growth and solid profitability margins highlight effective management and market position. While the balance sheet shows moderate leverage, the company’s ability to generate strong returns on equity and manage cash flows effectively positions it well for future growth. Continued attention to maintaining equity levels and managing debt will be crucial to sustaining its financial health.

Income Statement

PayPal shows strong profitability with a consistent increase in revenue over the years, reflected in a positive Revenue Growth Rate from 2023 to 2024. Gross Profit Margin remains solid at 45.4% TTM (Trailing-Twelve-Months) indicating efficient cost management. The Net Profit Margin stands at 14.3% TTM, showing effective bottom-line profitability. EBIT and EBITDA margins at 18.1% and 20.8% TTM respectively denote strong operational efficiency. The company has maintained stable profitability metrics over time, reflecting a strong competitive position in the financial industry.

Balance Sheet

PayPal's balance sheet reflects moderate financial leverage with a Debt-to-Equity Ratio of 0.56 TTM, indicating a balanced use of debt in its capital structure. The Equity Ratio of 24.9% TTM shows a decent proportion of equity financing. Return on Equity is strong at 22.4% TTM, demonstrating efficiency in generating returns from shareholders' equity. While the company maintains a stable equity base, the slight decrease in Stockholders' Equity over time could be a concern if the trend continues.

Cash Flow

PayPal demonstrates healthy cash flow management with a strong Operating Cash Flow to Net Income Ratio of 1.47 TTM, indicating excellent conversion of net income to cash. The Free Cash Flow to Net Income Ratio is robust at 1.31 TTM, underscoring effective cash generation beyond capital expenditures. Free Cash Flow has shown variability, but the TTM data indicates a stable increase, suggesting effective management of capital investments and operational cash flows.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
31.87B	31.80B	29.77B	27.52B	25.37B	21.45B
	Gross Profit
14.45B	14.66B	13.70B	13.77B	14.00B	11.78B
	EBIT
5.78B	5.33B	5.03B	3.84B	4.26B	3.29B
	EBITDA
7.05B	6.74B	6.83B	4.99B	5.60B	6.46B
	Net Income Common Stockholders
4.55B	4.15B	4.25B	2.42B	4.17B	4.20B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.82B	10.82B	14.06B	10.85B	9.50B	13.08B
	Total Assets
81.61B	81.61B	82.17B	78.72B	75.80B	70.38B
	Total Debt
9.88B	9.88B	9.68B	10.42B	9.05B	8.94B
	Net Debt
3.32B	3.32B	595.00M	2.64B	3.85B	4.14B
	Total Liabilities
61.19B	61.19B	61.12B	58.44B	54.08B	50.32B
	Stockholders Equity
20.42B	20.42B	21.05B	20.27B	21.73B	20.02B
Cash Flow		Free Cash Flow
5.97B	6.77B	4.22B	5.11B	4.89B	5.35B
	Operating Cash Flow
6.69B	7.45B	4.84B	5.81B	5.80B	6.22B
	Investing Cash Flow
-3.05B	1.59B	752.00M	-3.42B	-5.15B	-16.55B
	Financing Cash Flow
-4.92B	-8.28B	-2.99B	-1.20B	-557.00M	12.45B

PayPal Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 71.65
• 50DMA: Positive
• 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 Neutral. The current price of 71.65 is above the 20-day moving average (MA) of 69.17, above the 50-day MA of 66.67, and below the 200-day MA of 76.29, indicating a neutral trend. The MACD of 1.91 indicates Negative momentum. The RSI at 61.01 is Neutral, neither overbought nor oversold. The STOCH value of 59.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PYPL.

PayPal Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
V	82 Outperform	$713.42B	37.42	50.03%	0.60%	10.19%	12.45%
MA	77 Outperform	$532.49B	41.13	188.92%	0.49%	12.94%	13.22%
PYPL	76 Outperform	$70.33B	16.29	22.20%	―	4.50%	12.82%
AXP	76 Outperform	$209.69B	20.91	34.02%	0.98%	8.45%	17.89%
WU	72 Outperform	$3.27B	3.67	136.84%	9.51%	-5.16%	59.60%
SOFI	69 Neutral	$14.67B	30.42	7.51%	―	21.24%	―
Sector *	64 Neutral	$12.78B	9.87	7.67%	17015.06%	12.34%	-5.99%

PayPal Holdings Corporate Events

Rodney Adkins to Leave PayPal Board in April

On April 4, 2025, Rodney Adkins informed PayPal Holdings, Inc. that he will not stand for re-election to the Board of Directors at the 2025 Annual Meeting of Stockholders. Adkins, who has been a director since September 2017, played a significant role in guiding PayPal’s growth and transformation, and his departure will lead to a reduction of the Board size to 11 directors. His contributions were highly valued by the company, as noted by Enrique Lores, Chair of PayPal’s Board of Directors, and Alex Chriss, President and CEO of PayPal.

PayPal Appoints Joy Chik to Board of Directors

On March 10, 2025, PayPal Holdings appointed Joy Chik, President of Identity and Network Access at Microsoft, to its Board of Directors, expanding the board from 11 to 12 members. Chik, with over 26 years of corporate and board experience, is expected to contribute significantly to PayPal’s strategic shift from a payments platform to a full-stack commerce API, leveraging her expertise in AI, identity, and security to drive growth and innovation.

PayPal Appoints Jamie Miller as CFO/COO

On February 25, 2025, PayPal announced the appointment of Jamie Miller as Chief Financial and Operating Officer, coinciding with its Investor Day event. During the event, PayPal reaffirmed its 2025 financial guidance and introduced a strategic growth outlook through 2027, including the launch of PayPal Open, a unified merchant platform, and expanded partnerships with Verifone and J.P. Morgan Payments to enhance its global commerce capabilities.