PayPal Holdings, Inc. (PYPL) Fair Value & PE Analysis
Financial - Credit Services · NASDAQ
Current Price
$41.53
PE Ratio (TTM)
7.5x
Intrinsic Value
$60.01
+30.8% margin of safety
What Is PayPal Holdings, Inc.'s Fair Value?
As of 2026-06-12, applying a 7.0x earnings multiple to PayPal Holdings, Inc.'s (PYPL) earnings per share of $5.54 yields a fair value estimate of $60.01 per share, versus a market price of $41.53.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $42.18 to $80.88. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How our PE model works · Recalculate in PE mode · PYPL intrinsic value (DCF view)
Is PayPal Holdings, Inc. (PYPL) Overvalued?
At $41.53, PYPL trades below its PE-based fair value estimate by a wide margin. By this model the stock looks cheap relative to its earnings power, but check whether earnings are sustainable before reading too much into it.
COMPETITIVE MOAT
↑Network Effects
PayPal's vast user and merchant network creates a powerful flywheel. More users attract more merchants, and vice versa, making it difficult for new entrants to compete.
↑Brand Recognition & Trust
PayPal is a globally recognized and trusted brand for online transactions. This established trust reduces friction for consumers and businesses alike.
↑Data & Insights
Years of transaction data provide PayPal with valuable insights into consumer behavior and fraud patterns. This proprietary data can be leveraged for product development and risk management.
INVESTMENT RISKS
↓Intensifying Competition
Emerging payment solutions, including X Money, and established players are aggressively competing for market share. This pressure can erode PayPal's growth and profitability.
↓Slowing Growth Trajectory
Weak guidance and market sentiment suggest a slowdown in PayPal's historical growth. Macroeconomic headwinds and competitive pressures are impacting performance.
↓Regulatory Scrutiny
The financial services industry faces ongoing regulatory changes. New regulations could impact PayPal's business model, compliance costs, and operational flexibility.
Base case
PYPL base case PE valuation
Intrinsic Value
$60.01
Margin of safety
+30.8%
Expected annual return
+7.6%
Base case assumptions: 7.3% annual earnings growth, 7x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the PYPL PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for PayPal Holdings, Inc. respond.
Open PE Calculator for PYPLCompany Overview
PayPal Holdings, Inc. provides a worldwide technological framework that facilitates digital financial transactions for both businesses and individual users. The company offers a wide array of payment services through well-known brands such as PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy. Through its extensive platform, consumers are able to send and receive funds across roughly 200 global markets and in approximately 100 different currencies. Additionally, users can transfer money to their bank accounts in 56 currencies and maintain account balances in 25 distinct currencies within their PayPal accounts. Founded in 1998, the company's corporate headquarters are situated in San Jose, California.
Financial Metrics — PYPL PE Stock Valuation Data
PE Ratio (TTM)
7.5x
PEG Ratio
0.39
Earnings Yield
13.34%
ROE (TTM)
25.1%
Revenue/Share (TTM)
$36.95
Dividend Yield
1.01%
Debt/Equity
0.47x
Frequently Asked Questions
What is the PE ratio of PYPL?
The trailing twelve-month PE ratio of PYPL reflects how much investors pay per dollar of PayPal Holdings, Inc.'s earnings. This metric is most useful when compared to Financial - Credit Services peers and the company's own historical range.
Is PYPL overvalued based on PE ratio?
PYPL's PE of 7.5x combined with a PEG ratio of 0.39 provides a growth-adjusted perspective. A PEG below 1.0 suggests PYPL may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Financial - Credit Services, a DCF analysis may be more appropriate.
How do I value PYPL stock using PE ratio?
To value PayPal Holdings, Inc. using PE: (1) Compare the current PE (7.5x) against the Financial - Credit Services median to assess relative pricing, (2) check the PEG ratio (0.39) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of PYPL?
PYPL's PEG ratio is 0.39, calculated by dividing the PE ratio (7.5x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for PYPL stock valuation?
PE ratio gives a quick relative read — how PYPL is priced versus Financial - Credit Services peers. DCF provides an absolute value based on projected free cash flows. For PYPL, with a strong ROE of 25.1%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See PYPL DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Financial Services valuationsP/E and DCF value PYPL with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.