PayPal (PYPL) Valuation Check After Analyst Downgrades and Softer Branded Checkout Outlook

PayPal Holdings (PYPL) just took another hit on the sentiment front, with fresh downgrades from big Wall Street firms after management signaled a slower turnaround for its core branded checkout business.

See our latest analysis for PayPal Holdings.

Those cautious signals are feeding into the tape, too, with the share price at about $61.66 and a steep year to date share price return of roughly negative 28 percent. This has contributed to a five year total shareholder return of around negative 74 percent, which shows momentum is still fading despite new initiatives in AI commerce and stablecoin partnerships.

If PayPal’s recent volatility has you rethinking where you look for growth in payments and fintech, this could be a useful moment to explore fast growing stocks with high insider ownership.

With earnings still growing, a near 49 percent intrinsic value discount, and Wall Street now largely on the sidelines, is PayPal a classic contrarian setup, or is the market rightly pricing in years of slower growth ahead?

Most Popular Narrative Narrative: 41.4% Undervalued

Based on the narrative from Zwfis, PayPal’s fair value of $105.25 sits well above the $61.66 last close, which the author frames as a deep value opportunity.

The biggest thing that makes me think PayPal is going somewhere is along the lines of their PayPal open which is centralized around merchants being able to use PayPal for transactions with customers. As they are able to gain more traction with this they are bringing in two big sources of revenue/growth.

Read the complete narrative.

Want to see how steady revenue gains, rising profitability, and a richer future earnings multiple combine into that upside target? The full narrative unpacks every assumption that drives this valuation view.

Result: Fair Value of $105.25 (UNDERVALUED)

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

However, slower Venmo monetization or weaker merchant adoption of PayPal Open could leave growth below expectations and undermine that undervaluation thesis.

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 dive into the numbers yourself, you can build a custom narrative in just a few minutes: Do it your way.

A great starting point for your PayPal Holdings research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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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