PYPL Analysis — TradeApes

PayPal Holdings, Inc. (PYPL)

Technology Diversified Services

$54.96 close · Sep 05, 2026

Undervalued (Medium) Est. $74.40 71 Health · Healthy

Above 200 SMA

52W -20.7% from High

Methodology Breakdown

Mature

Our Estimate

$74.40 Medium confidence

Equal-weighted blend of 2 independent methods, which span $63.01–$85.80. Current price $52.67 is below our estimate.

Method	Value	Role
DCF (Base Case)	$63.01	IN ESTIMATE
DCF (TTM-anchored)	$63.01	IN ESTIMATE
Peer Multiples	$85.80	IN ESTIMATE
Earnings Power Value	$39.38	CROSS-CHECK
Book Value Anchor	$61.10	CROSS-CHECK
Earnings Anchor	$107.75	CROSS-CHECK
Cash Floor	$10.25	CROSS-CHECK
NAV Anchor	$61.10	CROSS-CHECK

In estimate — combined into our number · Cross-check — computed for context, not counted

📈

Undervalued -56.3%

Market cap (50.56B) is 56.3% below the bear-case DCF fair value (115.75B)

Sep 05

Health Score

Out of 100

Healthy

Pillar Scores

Financial Strength

Operating Trend

Valuation

Undervalued 79

Capital Allocation

Risk Management

Positives

↑ free-cash-flow margin +3.5

↑ free-cash-flow yield +3.9

↑ earnings yield (absolute) +1.9

Concerns

↓ Altman Z (retained-earnings corrected) -1.7

Signal contribution: +36.3 from strengths -1.7 from concerns

Health Score Trend 9 snapshots

Cross-Check: Greenblatt Magic Formula

⚠ Mild Divergence

Earnings Yield

13.3%

Rank 81 / 1256

Return on Capital

45.6%

Rank 579 / 1256

Combined Rank

84th pctl

1256 companies ranked

Based on Joel Greenblatt's Magic Formula methodology. Not investment advice.

Financials

TTM Financials

Revenue ?Total sales generated from the company's primary business activities over the trailing twelve months.	33.73B
Gross Profit ?Revenue minus cost of goods sold. What remains before operating expenses — reflects pricing power and production efficiency.	—
Operating Income ?Profit from core business operations after all operating expenses (EBIT). Excludes interest and taxes.	6.02B
Net Income ?Bottom-line profit after all expenses, interest, and taxes are deducted from revenue.	5.06B
Free Cash Flow ?Operating cash flow minus capital expenditures. The actual cash the business generates after maintaining its assets — the truest measure of profitability.	5.50B
EBITDA ?Earnings before interest, taxes, depreciation & amortization. A proxy for operating cash earnings that strips out accounting and financing differences.	6.98B
Total Debt ?Combined short-term and long-term interest-bearing debt obligations. Compare against cash and earnings to gauge leverage risk.	9.41B
Cash & Equivalents ?Highly liquid assets on hand — cash, money market funds, and short-term securities. The company's immediate financial cushion.	6.98B

Valuation

Market Cap	50.56B
Enterprise Value	53.65B
EV / Revenue	1.6x
EV / EBITDA	7.7x
P/E (TTM)	10.0x
Forward P/E (extrapolated)	4.8x
PEG	0.2x
P/FCF	9.2x
FCF Yield	10.9%

EV/EBITDA vs history — 35% percentile (mid-range)

CheapMidExpensive

EV/Sales vs history — 35% percentile (mid-range)

CheapMidExpensive

P/Book vs history — 35% percentile (mid-range)

CheapMidExpensive

DCF Fair Value Range (base CAGR: 10.9%)

Bear

$125.82

Base

$172.99

Bull

$235.69

Bear $126 Current $54.96 (below range) Bull $236

Market is pricing in -11.2% FCF growth annually — base model assumes 10.9%

Key Metrics

Gross Margin ?Gross profit as a % of revenue. Measures how efficiently the company produces its goods or services — higher is better.	—
EBITDA Margin ?EBITDA as a % of revenue. Shows core operating profitability before accounting adjustments — useful for comparing across industries.	20.7%
Net Margin ?Net income as a % of revenue. The ultimate measure of overall profitability after every expense, interest payment, and tax is accounted for.	15.0%
FCF Margin ?Free cash flow as a % of revenue. Shows how much of each dollar of revenue converts into real, spendable cash.	16.3%
Revenue Growth (YoY) ?Year-over-year change in total revenue. Measures business momentum — sustained growth above 15% is typically considered strong.	5.8%
Net Income Growth (YoY) ?Year-over-year change in net income. Shows whether profits are growing faster or slower than revenue — a key indicator of improving or deteriorating quality.	11.3%
Piotroski F-Score ?Score from 0–9 measuring financial strength across profitability, leverage, and efficiency signals. 8–9 = strong, 0–2 = distressed.	7 / 9
Altman Z-Score ?Bankruptcy risk model. Above 2.99 = safe zone, 1.81–2.99 = grey zone, below 1.81 = distress signal. Most useful for manufacturing companies.	1.40

Community Sentiment

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Quarterly Financials

Metric	Q1 '26	Q4 '25	Q3 '25	Q2 '25	Q1 '25	Q4 '25	Q3 '25	Q2 '25	Q1 '24	Q4 '23	Q3 '23	Q2 '23
Revenue ?Total quarterly sales from primary business operations.	8.35B	8.68B	8.42B	8.29B	7.79B	8.37B	7.85B	7.89B	7.70B	8.03B	7.42B	7.29B
Gross Profit ?Quarterly revenue minus cost of goods sold.	—	—	—	—	—	—	—	—	—	—	—	—
Operating Income ?Quarterly profit from core operations before interest and taxes (EBIT).	1.49B	1.51B	1.52B	1.50B	1.53B	1.44B	1.39B	1.33B	1.17B	1.73B	1.17B	1.13B
Net Income ?Quarterly bottom-line profit after all expenses and taxes.	1.11B	1.44B	1.25B	1.26B	1.29B	1.12B	1.01B	1.13B	888.0M	1.40B	1.02B	1.03B
FCF ?Quarterly free cash flow: operating cash minus capital expenditures.	903.0M	2.19B	1.72B	692.0M	964.0M	2.19B	1.45B	1.37B	1.76B	2.47B	1.10B	-350.0M

Revenue & Free Cash Flow

Market Cap vs. DCF Fair Value Band

Shaded region = bear-to-bull DCF range. Line = actual market cap.

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Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Scores and valuations are derived from SEC filings and publicly available data. Always do your own research before making investment decisions.