PayPal (PYPL) Valuation: Assessing the Upside After Recent Share Price Rebound

PayPal Holdings (PYPL) shares have bounced around over the past month, rising more than 11%. Investors are watching the payments company closely as they weigh recent performance alongside longer-term trends in the financial technology industry.

See our latest analysis for PayPal Holdings.

Despite a recent 12% jump in the share price over the past month, PayPal Holdings is still working to reverse a longer-term trend that has seen momentum fade, with a 1-year total shareholder return of -4% and a striking 5-year total shareholder return of -63%. In the near term, investors seem to be cautiously optimistic, perhaps seeing signs of stabilization even as the broader sector reassesses growth prospects and valuations.

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With shares rebounding yet long-term gains elusive, the key question is whether the current valuation overlooks PayPal’s potential or if the market has already accounted for any future turnaround. This could leave little room for upside.

Most Popular Narrative: 28% Undervalued

According to Zwfis, the narrative points to a fair value far above the latest closing price of $75.75. This sets an optimistic stage for PayPal’s next chapter. The gap invites questions about what underpins this much higher valuation and what catalysts could drive shares toward that number.

Venmo is a very popular app and tool that people are using all over. One thing that they and past management had issues with was how to monetize it. Slowly, besides transaction fees and earning interest off of customers' unused cash, they have started to add a debit and a credit card into the mix. In addition, what I am most bullish on is how they are enabling Venmo to be used in stores. Even the other day when I was on DoorDash, I noticed that Venmo is now an option for payment. They have already made a very simple process begin to spread into the merchant business, which I believe will bring in a lot of revenue while raising profit margins.

Read the complete narrative.

Want to know what’s powering this ambitious price target? Deep inside this narrative you’ll find surprising projections for PayPal’s revenue, ambitious management targets, future profit expansion, and a bold bet on the company’s evolving business model. Ready to see what could fuel such a steep climb? Uncover the forecasts, the crucial assumptions, and what makes this valuation so spirited.

Result: Fair Value of $105.25 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent competition and slower than expected adoption of new merchant solutions could temper PayPal’s ability to reach these ambitious targets.

Find out about the key risks to this PayPal Holdings narrative.

Build Your Own PayPal Holdings Narrative

If you see the story differently or want to dig into the details yourself, you can craft your own unique narrative in just a few minutes: Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding PayPal Holdings.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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