PYPL AI Stock Analysis – Buy, Hold, or Avoid?
PayPal Holdings, Inc. (PYPL)
PayPal (PYPL) offers attractive long-term value with strong fundamentals and undervalued metrics, but faces near-term technical weakness and deteriorating sentiment. Investors should expect moderate upside potential over time, but short-term risks and execution uncertainties warrant patience and close monitoring. The stock is best suited for value-oriented or patient investors rather than momentum traders.
Fundamentals
PayPal (PYPL) demonstrates a fundamentally sound position with meaningful earnings growth, solid margins, and consistent beat patterns amid a period of moderate revenue expansion. While the overall growth pace is not aggressive compared to earlier years, disciplined cost controls and an attractive valuation reinforce its appeal for value-oriented investors.
Financial Highlights
- Revenue
- Net Income
- Net Margin (%)
Revenue
7.21% YoY
Q1 2026
Net Income
-13.52% YoY
Q1 2026
Net Margin
Q1 2026
Growth Metrics
Revenue Growth YoY
Latest Quarter: Q1 2026
Net Income Growth YoY
Latest Quarter: Q1 2026
Revenue Per Share Growth YoY
Latest Quarter: Q1 2026
EPS Growth YoY
Latest Quarter: Q1 2026
Book Value Per Share Growth YoY
Latest Quarter: Q1 2026
| Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | |
|---|---|---|---|---|---|---|---|---|
| Revenue | 8.4B | 8.7B | 8.4B | 8.3B | 7.8B | 8.4B | 7.8B | 7.9B |
| Revenue Growth YoY | +7.21% | +3.71% | +7.26% | +5.11% | +1.19% | +4.24% | +5.78% | +8.21% |
| Net Income | 1.1B | 1.4B | 1.2B | 1.3B | 1.3B | 1.1B | 1.0B | 1.1B |
| Net Income Growth YoY | -13.52% | +28.19% | +23.56% | +11.79% | +44.93% | -20.04% | -0.98% | +9.62% |
| EPS | $1.22 | $1.54 | $1.31 | $1.30 | $1.31 | $1.12 | $1.00 | $1.08 |
| EPS Growth YoY | -6.87% | +37.50% | +31.00% | +20.37% | +57.83% | -13.85% | +7.53% | +16.13% |
Profitability Metrics
Gross Margin
TTM
Operating Margin
TTM
Net Margin
TTM
Return on Equity
TTM
Return on Assets
TTM
| Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | |
|---|---|---|---|---|---|---|---|---|
| Gross Margin | 45.61% | 46.50% | 45.99% | 46.38% | 47.70% | 47.04% | 46.57% | 45.76% |
| Operating Margin | 17.81% | 17.42% | 18.06% | 18.15% | 19.64% | 17.22% | 17.73% | 16.80% |
| Net Margin | 13.32% | 16.56% | 14.83% | 15.21% | 16.52% | 13.40% | 12.87% | 14.31% |
| Return on Equity (ROE) | 5.56% | 7.09% | 6.18% | 6.24% | 6.35% | 5.49% | 5.01% | 5.47% |
| Return on Assets (ROA) | 1.60% | 2.08% | 1.82% | 1.84% | 1.84% | 1.59% | 1.40% | 1.55% |
Technical Analysis
PYPL is currently in a strong downtrend with price below its key moving averages and exhibiting bearish momentum. While some short-term consolidation and minor bullish MACD signals appear, the overall technical landscape remains negative, indicating potential further downside risk. Key support levels near $45 and $39 should be watched closely for trade entries or breakdowns.
No extreme reading
Price in downtrend
Trend developing
50 below 200 - bearish
Key Technical Values
Price with Moving Averages
50-day, 150-day and 200-day simple moving averages
Relative Strength Index
Momentum oscillator measuring speed and magnitude of price changes
RSI (14)
Earnings
PayPal (PYPL) demonstrates a fundamentally sound position with meaningful earnings growth, solid margins, and consistent beat patterns amid a period of moderate revenue expansion. While the overall growth pace is not aggressive compared to earlier years, disciplined cost controls and an attractive valuation reinforce its appeal for value-oriented investors.
Latest Earnings
Q1 2026 Earnings (Mar 31, 2026)
Earnings Per Share (EPS)
Actual
$1.34
Estimated
$1.27
Surprise
+$0.07
Surprise %
+5.51%
Revenue
Actual
$8.35B
Estimated
$8.05B
Surprise
+$303.09M
Surprise %
+3.77%
Historical Earnings
| Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | |
|---|---|---|---|---|---|---|---|---|
| Earnings Per Share | ||||||||
| EPS (Actual) | $1.34 | $1.23 | $1.34 | $1.40 | $1.33 | $1.19 | $1.20 | $1.19 |
| EPS (Estimated) | $1.27 | $1.29 | $1.20 | $1.30 | $1.16 | $1.11 | $1.07 | $0.99 |
| EPS Surprise | +$0.07 | -$0.06 | +$0.14 | +$0.10 | +$0.17 | +$0.08 | +$0.13 | +$0.20 |
| % Diff | +5.5% | -4.7% | +11.7% | +7.7% | +14.7% | +7.2% | +12.1% | +20.2% |
| Revenue | ||||||||
| Revenue (Actual) | $8.35B | $8.68B | $8.42B | $8.29B | $7.79B | $8.37B | $7.85B | $7.86B |
| Revenue (Estimated) | $8.05B | $8.79B | $8.24B | $8.08B | $7.85B | $8.26B | $7.89B | $7.82B |
| Revenue Surprise | +$303.09M | -$112.38M | +$180.89M | +$203.55M | -$58.07M | +$108.32M | -$40.79M | +$39.09M |
| % Diff | +3.8% | -1.3% | +2.2% | +2.5% | -0.7% | +1.3% | -0.5% | +0.5% |
Valuation
PayPal (PYPL) currently trades at valuation multiples substantially below its financial services sector peers, signaling potential undervaluation amidst a backdrop of slowing growth and mixed forward guidance. While earnings growth estimates remain modest and some operational risks persist, the company's strong free cash flow generation and improving profitability metrics support upside potential relative to current prices.
Valuation Metrics
Price to Earnings
TTM
Price to Sales
TTM
Price to Book
TTM
Enterprise Value to EBITDA
TTM
Enterprise Value to Revenue
TTM
| Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | |
|---|---|---|---|---|---|---|---|---|
| Price to Earnings | 9.28 | 9.46 | 13.00 | 14.28 | 12.50 | 18.98 | 19.60 | 13.35 |
| Price to Sales | 4.94 | 6.26 | 7.71 | 8.69 | 8.26 | 10.17 | 10.09 | 7.64 |
| Price to Book | 2.06 | 2.68 | 3.21 | 3.56 | 3.18 | 4.17 | 3.93 | 2.92 |
| Enterprise Value to EBITDA | 29.39 | 28.54 | 35.53 | 40.71 | 35.01 | 50.35 | 48.99 | 35.48 |
| Enterprise Value to Revenue | 5.23 | 6.49 | 7.98 | 9.25 | 8.77 | 10.57 | 10.44 | 7.90 |
Sentiment & Analyst Ratings
PayPal's recent Q1 2026 earnings beat expectations with stronger revenue and payment volume growth, but the stock has faced downward pressure due to weak Q2 guidance and ongoing transformation risks. Analyst sentiment is predominantly neutral with a consensus hold rating, reflecting investor caution amidst competitive pressures and execution uncertainty. Social media sentiment mirrors this caution, showing a mixed to bearish mood among retail investors.
Analyst Recommendations
Risk Assessment
PayPal presents a moderate financial risk profile with a stable but slightly below ideal liquidity position and manageable debt levels. Recent earnings beat expectations, but margin compression, competitive pressures, and cautious future guidance weigh on its financial outlook. Market sentiment is neutral to cautious with analyst consensus favoring a hold due to uncertainties in execution and profitability sustainability.
Liquidity & Solvency
Current Ratio
Latest Quarter: Q1 2026
Quick Ratio
Latest Quarter: Q1 2026
Debt-to-Equity
Latest Quarter: Q1 2026
Debt-to-Assets
Latest Quarter: Q1 2026
| Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | |
|---|---|---|---|---|---|---|---|---|
| Liquidity Metrics | ||||||||
| Current Ratio | 1.26 | 1.29 | 1.34 | 1.33 | 1.30 | 1.26 | 1.25 | 1.24 |
| Quick Ratio | 1.26 | 1.29 | 1.34 | 1.33 | 1.30 | 1.26 | 1.25 | 1.24 |
| Solvency Metrics | ||||||||
| Debt-to-Equity | 0.47 | 0.49 | 0.56 | 0.56 | 0.56 | 0.48 | 0.49 | 0.47 |
| Debt-to-Assets | 0.12 | 0.12 | 0.14 | 0.14 | 0.14 | 0.12 | 0.12 | 0.12 |
Liquidity Assessment
Current Ratio: 1.26(Adequate)
Quick Ratio: 1.26(Strong)
The company has adequate liquidity but may face challenges in a downturn.
Solvency Assessment
Debt-to-Equity: 0.47(Low)
Debt-to-Assets: 0.12(Low)
The company maintains a balanced capital structure with manageable debt levels.
Frequently Asked Questions about PYPL
AI Answers: Common Questions About PYPL
Get AI-powered answers to the questions investors ask most about PayPal Holdings, Inc.
At $45.37 with a P/E of 8.51 and EV/EBITDA of ~6, PayPal is undervalued relative to sector averages (P/E ~18.5, EV/EBITDA ~10), offering an attractive entry for long-term investors. However, technicals are bearish and sentiment is weak, so short-term traders should wait for a confirmed reversal. For patient buyers, the current price provides a margin of safety, but expect volatility.
Unless your thesis has changed or you have a short-term focus, there is little reason to sell now: fundamentals remain strong, valuation is attractive, and the balance sheet is solid. However, if you cannot tolerate near-term downside (support at $45/$39), or if the business fails to execute on cost savings and growth, a partial trim may be warranted.
The biggest risks are margin compression from rising costs, slowing revenue growth (2025: +4.3% YoY), and execution risk on transformation and Venmo monetization. Regulatory scrutiny (UK FCA probe), competitive threats (Apple, Stripe), and a current ratio of 1.26 (adequate but not strong) also warrant attention.
Technically, key support is at $45.11 and $39.00, with resistance at $47.00, $50.00, and $53.74. Analyst targets range widely from $34 to $65, with the average implying 12–15% upside. A break below $45 could see $39 tested, while a move above $50 would signal a bullish reversal.
PayPal is undervalued: P/E is 8.51 (vs. sector ~18.5), EV/EBITDA is ~6 (vs. sector ~10), and price-to-sales is below historical averages. The market is pricing in low growth and execution risk, but strong cash flow and profitability metrics support a higher fair value if growth stabilizes.
Fundamentally, PayPal is strong: net margin improved to 15.8% in 2025, ROE is ~19%, and free cash flow is robust (~$6B projected). Revenue growth is moderate but sustainable, and the balance sheet is healthy with low leverage (debt/equity 0.47) and ample cash.
Technical analysis is bearish: price is below all major moving averages, a death cross is active, and RSI is weak (~38). Support is at $45 and $39, with resistance at $47–$50; no bullish reversal confirmed, so further downside is possible in the short term.
Key catalysts include upcoming earnings (watch for margin and EPS beats), progress on cost-saving and AI-driven transformation, Venmo monetization updates, and any regulatory developments. A technical reversal above $50 or positive guidance could shift sentiment and trend.
Want a Personalized Answer?
Get AI-powered insights tailored to your risk tolerance and investment goals.