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    PayPal Holdings (PYPL) Could Be 13% Undervalued Following Takeover Interest

    Simply Wall St·07/17/2026 10:28:06
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    PayPal Holdings (PYPL) is back in focus after payments company Stripe and private equity firm Advent International reportedly offered US$60.50 per share to acquire the stock in a deal valued at over US$53b.

    See our latest analysis for PayPal Holdings.

    The takeover headlines have triggered a sharp short term rebound in PayPal Holdings, with a 7 day share price return of 25.18% and 30 day share price return of 29.97%. However, the 1 year total shareholder return is still down 22.53% and the 5 year total shareholder return is down 81.16%, so recent momentum is building off a weak longer term base.

    If this bid has you thinking more broadly about opportunities in digital payments and financial technology, it can be useful to compare PayPal against other companies using the 18 top founder-led companies

    After a 25% weekly jump on the takeover headlines and a 5-year return still down more than 80%, is PayPal now pricing in most of the opportunity already, or does the current valuation still point to meaningful upside ahead?

    Most Popular Narrative: 12.7% Undervalued

    According to one of the most followed narratives on PayPal Holdings, a fair value of $65 versus the last close at $56.73 leaves room for upside if the business simply holds its ground.

    The market prices PayPal (~8x earnings) as a structurally dying payments company. The numbers show something else, ~$6.8b in annual free cash flow, a net cash balance sheet (~$13.5b cash vs. ~$11.6b debt), ~440m active accounts, and total payment volume of ~$464b per quarter, still growing ~11%.

    Read the complete narrative.

    Want to see why this narrative argues PayPal does not need rapid growth for its valuation to work? The case leans heavily on steady margins, resilient transaction volumes, and a buyback pace that could reshape per share earnings faster than headline forecasts suggest.

    Result: Fair Value of $65 (UNDERVALUED)

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

    However, this PayPal Holdings story can quickly change if Branded Checkout weakens again or if transaction margins compress further. This would challenge the stabilization narrative.

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

    Next Steps

    If the mixed sentiment around PayPal Holdings leaves you unsure, take the time to review the full picture for yourself and weigh both sides of the story with the 3 key rewards and 1 important warning sign

    Looking for more investment ideas beyond PayPal?

    If PayPal has sharpened your focus on where capital can work harder, do not stop here. The next move in your portfolio could come from a very different kind of stock.

    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.