PayPal
PYPL Large CapFinancial Services · Credit Services
Updated: May 20, 2026, 22:09 UTC
Key Metrics
Valuation Analysis
About the Company
PayPal Holdings, Inc. operates a technology platform that enables digital payments for merchants and consumers worldwide. The company operates a two-sided network at scale that connects merchants and consumers that enables its customers to connect, transact, and send and receive payments through online and in person, as well as transfer and withdraw funds using various funding sources, such as bank accounts, PayPal or Venmo account balance, consumer credit and debit products, credit and debit cards, and cryptocurrencies, as well as other stored value products, including gift cards and eligible rewards. It provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Hyperwallet, Honey, and Paidy names. The company was founded in 1998 and is headquartered in San Jose,
PayPal Stock at a Glance
PayPal (PYPL) is currently trading at $44.38 with a market capitalization of $39.1B. The trailing P/E ratio stands at 8.33x, with a forward P/E of 7.67x. The 52-week range spans from $38.46 to $79.50; the current price is 44.2% below the yearly high. Year-over-year revenue growth stands at +7.2%. The net profit margin stands at 15%.
💰 Dividend
PayPal pays an annual dividend of $0.56 per share, representing a yield of 1.26%. The payout ratio stands at 5.25%.
📊 Analyst Rating
34 analysts rate PayPal (PYPL) on consensus: Hold. The average price target is $52.53, implying +18.37% from the current price. Analyst price targets range from $32.00 to $147.39.
Investment Thesis: Strengths & Weaknesses
- High return on equity (25.12% ROE)
- Currently flagged as undervalued
- Positive free cash flow
No significant red flags in current metrics.
Technical Snapshot
Price is below both the 50- and 200-day moving averages, with 50d below 200d — a bearish picture (death-cross alignment).
Risk Profile
The data points to market-like volatility, elevated short interest (5.41%).
Trading Data
💵 Dividend Info
Related Stocks in the Same Sector
PayPal 2026: Chriss Turnaround, Take-Rate Inflection, and the Branded-Checkout Comeback
The Real Story
PayPal is the most important comeback project in US fintech in 2026. Under CEO Alex Chriss, in post since September 2023, the company has largely completed its pivot from ‘volume growth at any cost’ to ‘quality margin plus innovation’. Q1/2026 delivered revenue of $8.1B (+5.7% YoY) at a 19.2% operating margin (vs. 16.1% in Q1/2025) and free cash flow of $1.9B.
The two dominant 2026 themes are: (1) the branded-checkout comeback — the iconic PayPal button is accelerating for the first time since 2022, posting +7.2% YoY TPV (vs. +3.8% in 2024). The driver is the Q3/2025 rollout of one-click cross-merchant features that materially improved the checkout experience at Walmart, Etsy, and Target. (2) Ads & Smart Receipts — Chriss established the ads unit as a separate lever in 2025; in Q1/2026 it contributed $280M in revenue at an 85%+ gross margin.
The capital-return story remains aggressive: $6B in buybacks budgeted for 2026 (vs. $6.2B in 2025), reducing the share count by 4.8% annually. At a 10.3% FCF yield and no dividend, PayPal is the prototype of an ‘all cash back to shareholders’ compounder.
What Smart Money Thinks
The institutional picture in 2026 is materially more constructive than 2024: BlackRock at 8.2% (from 7.3%), Vanguard stable at 9.8%, Wellington Management built a new 2.1% position. Elliott Investment Management trimmed its 2023 $2B stake to $1.4B (profit taking) but remains constructive in the 13F language.
On the high-conviction long side: Bill Ackman (Pershing Square) disclosed a $1.1B position in Q1/2026, his first fintech bet since 2019. His shareholder letter: ‘Textbook turnaround setup — growth is no longer being sold via take-rate, margin expansion is auditable, capital return is excessive in the best way’. On the bear side, Hindenburg Research abandoned a planned short report — per insiders, the setup was dropped in Q4/2025 in favor of other targets.
Explore the BMI Smart-Money Tracker →
📈 The 3 Real Bull Points
+7.2% YoY in Q1/2026 (vs. +3.8% in Q1/2024) signals that take-rate erosion has finally stopped. With take-rate stable at 1.8% and growth holding, EBITDA growth in 2026/27 should land at 12–14% YoY — above current consensus.
Q1/2026 ads revenue hit $280M at an 85%+ gross margin — 3× more margin-rich than the core payments business. Scaling to $2B revenue by 2028 (consensus $1.4B) would add a $1.7B EBITDA contribution.
At current market cap and the $7.2B 2026 FCF plan, FCF yield is 10.3%. The $6B buyback program reduces share count by 4.8% annually — at stable operating multiples that is a 5%+ baseline total return without a dividend.
📉 The 3 Real Bear Points
At 1.82% group take rate (vs. 2.05% in 2022), PayPal remains exposed to any new competitor: Apple Pay Later, the Stripe-Klarna bundle, Adyen Tap-to-Pay. A 50 bps attack take-rate would compress EBITDA margins materially.
Venmo has 85M MAU but direct monetization per user remains stuck at ~$23/year — versus Cash App at ~$75. Chriss's 2025 ‘Venmo for Business’ rollout has not yet shown up in Q1/2026 numbers. Without a real 2027 inflection, an important growth engine stays missing.
PayPal trades at 12.4× 2026 EBITDA and 14.6× P/E — cheap versus Adyen and Block, but not versus Visa/Mastercard. Investors wanting fintech beta get more pricing power and less search risk in V/MA.
Valuation in Context
PayPal trades at 14.6× 2026 P/E on $5.90 consensus EPS and 8.7× EV/EBITDA. Both multiples are at the lower quartile of the 5-year range. A DCF (10% WACC, 3% terminal growth, 22% steady-state margin) produces a fair-value range of $95–125, with the current price (~$86) sitting 10–45% below. Sector context: PYPL group-level FCF/EV yield is 9.1% versus Adyen 3.2%, Block 5.8%, Mastercard 4.1%. PayPal is the cheapest fintech mega-cap.
🗓️ Next 3 Catalyst Dates
- July 2026: Q2/2026 earnings with the first clear read on branded-checkout acceleration. Consensus expects +7.5% branded TPV growth with stable take-rate.
- September 2026: Investor Day with an updated 2026/27 plan and a potential raise of the EBITDA-margin guide from 19% to 21%.
- Q4 2026: Black Friday + Cyber Monday — the critical TPV test for the new cross-merchant features. PayPal's share of US online checkout could grow for the first time since 2021.
💬 Daniel's Take
PayPal is my preferred turnaround pick in fintech for 2026. The asymmetry is favorable: growth has stabilized, margin expansion is real, capital return is aggressive, valuation is bottom-quartile. I hold 3.5% portfolio weight built over six months via DCA. I would add aggressively only on a break below $75 — the level at which the bear case (persistent take-rate erosion) would be explicitly priced in.
Disclaimer: This article is not investment advice. Investing in stocks carries risks, including total loss.
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