Key Takeaways:
- PayPal is still working through weaker branded checkout trends, and that matters because branded checkout is the higher-value part of its payments business. The stock also remains sensitive to the CEO transition announced in February and to litigation tied to the company’s withdrawn 2027 targets.
- The business is still profitable and cash generative. Revenue reached $33.2 billion in 2025, the operating margin rose to 18.7%, and free cash flow was $5.6 billion, even as growth slowed and investors became more cautious about the mix driving results.
- PayPal stock could reasonably reach $69 per share by December 2028, based on our valuation assumptions.
- This implies a total return of 44.3% from today’s price of $48, with an annualized return of 14.4% over the next 2.7 years.
What Happened?
PayPal Holdings (PYPL) is relevant right now because investors are still digesting a sharp reset that began in early February. The company reported fourth-quarter revenue of $8.68 billion, slightly below expectations, and forecast 2026 profit that was weaker than Wall Street expected.
On the same day, PayPal also announced that Enrique Lores would replace Alex Chriss as CEO, which made the stock’s selloff feel like both an earnings miss and a strategy reset.
The pressure came from one part of the business more than any other: branded checkout. That is PayPal’s core button-and-wallet experience, and it generally offers better economics than unbranded processing.
Reuters reported that branded checkout growth slowed to 1% in the fourth quarter, down from 6% a year earlier, while PayPal also withdrew the 2027 targets it had introduced at Investor Day in 2025.
That weak setup helps explain why the stock is still down about 18% year to date, even after bouncing off its lows. Investors are asking whether PayPal can stabilize its best business line while still growing newer products like Venmo, Fastlane, and merchant tools.
More recently, PayPal has tried to show that product momentum is still real. The company expanded Venmo’s peer-to-peer reach by enabling transfers with PayPal users across 90 markets, brought PayPal USD to users across 70 markets, and launched Payment Links inside Canva for its 265 million monthly users.
Those launches matter because they show PayPal is still broadening distribution, but the stock will likely stay tied to whether that innovation can translate into better branded checkout growth and steadier earnings when first-quarter 2026 results arrive on May 5.
Here’s why PayPal stock could stay volatile through the next few quarters as investors look for proof that product innovation can offset slower growth in its core checkout franchise.
What the Model Says for PayPal Stock
We analyzed the upside potential for PayPal stock using valuation assumptions based on its large global payments network, rising profitability, and still-healthy cash generation.
Based on estimates of 4.0% annual revenue growth, 16.0% operating margins, and a normalized P/E multiple of 8.9x, the model projects PayPal stock could rise from $48 to $69 per share.
That would be a 44.3% total return, or a 14.4% annualized return over the next 2.7 years.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for PYPL stock:
1. Revenue Growth: 4%
PayPal’s revenue growth has slowed, but it has not disappeared. Revenue increased from $25.4 billion in 2021 to $33.2 billion in 2025, while 2025 revenue still rose 4.3% year over year. That tells investors the platform is still expanding, but not at the pace it once did.
PayPal can still grow total payment volume through products like Braintree and Venmo, but investors care more about branded checkout because it tends to be more profitable and more differentiated. Reuters said that branded checkout growth slowed sharply in the fourth quarter, which is why the market treated the February report as more than a simple revenue miss.
Based on analysts’ consensus estimates, we use a 4.0% revenue growth forecast. That aligns with the guided model and sits close to PayPal’s recent top-line trend. It also reflects a business that is still launching products and partnerships, but is not currently being valued as a fast grower.
2. Operating Margins: 16%
Margins are one reason the stock still has valuation support. PayPal’s operating margin improved from 17.0% in 2021 to 18.7% in 2025, while net income reached $5.2 billion last year. Even with slower growth, that level of profitability shows the business still has scale advantages.
The company has also been emphasizing discipline. At Investor Day in 2025, Alex Chriss said PayPal had returned to profitable growth and was consolidating to one platform to better serve consumers and merchants. That message matters because investors now want proof that efficiency can hold even while the company fixes its checkout experience and invests in newer products.
Based on analysts’ consensus estimates, we use 16.0% operating margins. That is actually below PayPal’s 2025 operating margin of 18.7%, so it builds in caution rather than expansion. It reflects the idea that PayPal may continue spending to support branded checkout, product development, and merchant adoption.
3. Exit P/E Multiple: 8.9x
The multiple is where most of the debate sits. PayPal’s overview metrics show the stock trading at about 8.8x LTM P/E and 8.9x NTM P/E, while the guided model also uses 8.9x. That is well below its 1-year historical P/E of 11.7x and far below its 5-year average of 20.7x from the valuation model.
That lower multiple tells you the market is not paying up for the business right now. Investors see competition from Apple, Google, Stripe, and other payment platforms, and they also see risk in a company that just changed CEOs and pulled longer-term targets. Reuters said the board concluded the pace of change and execution was not meeting expectations, which helps explain why the stock is being valued so conservatively.
Based on analysts’ consensus estimates, we maintain an 8.9x exit P/E multiple. That keeps the valuation anchored near where the stock already trades instead of assuming a major sentiment rebound. If PayPal executes better than expected, the multiple could prove too low, but the current model does not need that to show solid returns.
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What Happens If Things Go Better or Worse?
Different scenarios for PayPal stock through 2030 show varied outcomes based on branded checkout stabilization, margin discipline, and valuation changes (these are estimates, not guaranteed returns):
- Low Case: Branded checkout remains soft, and valuation stays compressed faster than expected → 5.5% annual returns
- Mid Case: PayPal stabilizes checkout trends and keeps monetizing Venmo, merchant tools, and platform scale → 8.6% annual returns
- High Case: Product execution improves, growth broadens, and the market gives the stock more credit again → 11.4% annual returns
The next move in the stock will likely depend on whether management can show cleaner progress in its core checkout business. New product launches are helpful, but investors will want those launches to show up in growth quality, not just in headlines.
If PayPal can pair stable revenue with disciplined margins and ongoing buybacks, the stock could keep closing the gap between today’s price and its modeled value.
See what analysts think about PYPL stock right now (Free with TIKR) >>>
Should You Invest in PayPal Holdings, Inc.?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up PYPL, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track PYPL alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
