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    Is PayPal Holdings (PYPL) A Bargain After Its M&A Push?

    Simply Wall St·09/19/2026 09:23:03
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    PayPal Holdings (PYPL) has put mergers and acquisitions on the menu. At a recent conference, CEO Enrique Lores said management plans to use free cash flow for deals aligned with the company’s defined growth priorities.

    Recent headlines have not stopped PayPal Holdings’ share price from slipping 15.9% over the past month, even after a 23.3% 90 day share price gain that followed deal speculation, Q2 earnings and new product efforts such as PayPal World and Venmo’s college campaigns.

    Spot emerging opportunities alongside PayPal Holdings by scanning a curated 16 high quality undiscovered gems that share strong fundamentals and sit off most investors' radar.

    PayPal Holdings has given investors a sharp rebound on deal buzz and product news, followed by a quick pullback. Is most of the re-rating already in the rear-view mirror, or does current pricing still leave meaningful upside on the table?

    Most Popular Narrative: 23% Undervalued

    PayPal Holdings last closed at $52.41, while the most followed narrative pegs fair value around $68. That gap underpins a view that the market is pricing in far more weakness than the current numbers actually show.

    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%. My core thesis: PayPal does not need to grow to re-rate, mere stabilization is enough.

    See why 92 investors see PayPal Holdings as 23% undervalued.

    According to Benjamin_Ziegler, who authored the most widely followed thesis on PayPal Holdings, this discount reflects a clash between weak recent share returns and much stronger underlying cash generation. The narrative argues that consistent free cash flow, continued buybacks and a still large user base could all matter more than modest earnings forecasts, which currently point to a 0.4% average annual decline over the next three years.

    That view leans heavily on PayPal Holdings trading at a P/E that is well below both its US Diversified Financial peers and the broader US market, while still producing earnings that have grown 7.6% per year over the past five years. It also leans on Simply Wall St’s cash flow based estimate, which puts future cash flow value at $125.83 per share compared with the latest $52.41 close, described as a 58.3% discount and classified as good value.

    The same narrative gives weight to quality and capital allocation markers around PayPal Holdings, rather than only to top line forecasts. Earnings are described as high quality, Return on Equity is reported at 24.7%, and management has been shrinking the share count through buybacks, while CEO compensation of about $530.10K sits well below typical pay for similarly sized US firms. Investors still need to weigh those positives against softer recent share performance, a 1 year total return that trailed both the US market and the Diversified Financial industry, and forecasts that do not currently point to strong growth.

    Result: Fair Value of $68 (UNDERVALUED)

    Still, this PayPal Holdings thesis can unravel quickly if Branded Checkout reverses again or if lower margin segments continue to squeeze overall profitability.

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

    Next Steps

    Mixed about the tone of this PayPal Holdings story so far. Move quickly, review the data yourself, and weigh both sides through the 3 key rewards and 1 important warning sign.

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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.