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PayPal (PYPL): Reassessing Valuation After Slowing Checkout Growth and New AI, Buyback, and Dividend Plans

Simply Wall St · 1d ago

PayPal (PYPL) just reminded investors that its core branded checkout growth is slowing, even as it doubles down on AI powered commerce, fresh client integrations, share buybacks, and its first ever dividend to help steady sentiment.

See our latest analysis for PayPal Holdings.

Those mixed signals are showing up in the chart too, with the stock sitting at $62.28 after a weak year to date share price return and a deeply negative five year total shareholder return. This suggests near term momentum is still fading even as management leans harder into AI and capital returns.

If PayPal’s reset has you thinking more broadly about where digital payments and AI might go next, this could be a good moment to explore high growth tech and AI stocks as fresh ideas for your watchlist.

With PayPal trading at a steep discount to its past highs, yet still facing slowing branded checkout growth, the next question is clear: is this a mispriced AI enabled turnaround, or is the market already discounting future gains?

Most Popular Narrative Narrative: 40.8% Undervalued

Zwfis values PayPal at well over its last close of $62.28, framing today’s price as a sizable gap to long term earnings power.

From running it you can see we fall between 90-100 roughly. Their DCF value even comes out at $133.95; which is almost double what their price is at as I am writing this.

Read the complete narrative.

Curious how this gap emerges? The narrative leans on accelerating profitability, richer margins, and a future earnings multiple more often reserved for market leaders. Want the full playbook?

Result: Fair Value of $105.25 (UNDERVALUED)

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

However, slowing branded checkout growth and execution risk around Venmo monetization and PayPal World adoption could derail these upbeat valuation assumptions.

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

Build Your Own PayPal Holdings Narrative

If you see the story differently or would rather dig into the numbers yourself, you can build a custom view in just 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.