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Assessing PayPal Holdings (PYPL) Valuation After New AI Partnerships And Merchant Analytics Launches

Simply Wall St · 4d ago

PayPal Holdings (PYPL) is back in focus after announcing new AI driven partnerships, including a collaboration with Microsoft to power Copilot Checkout and the rollout of its Transaction Graph Insights & Measurement analytics suite for merchants and advertisers.

See our latest analysis for PayPal Holdings.

For all the AI and blockchain headlines, the share price tells a tougher story. A 90 day share price return of 16.22% and a 1 year total shareholder return decline of 33.31% suggest that recent enthusiasm has yet to meaningfully reverse longer term weakness.

If this kind of payments and AI story interests you, it could be a good moment to widen your research and check out high growth tech and AI stocks as potential next ideas.

With PayPal shares down 33% over the past year, yet trading at a reported 52% intrinsic discount and about 31% below analyst targets, you have to ask: is this a mispriced comeback story, or is the market already baking in future growth?

Most Popular Narrative: 44.4% Undervalued

According to Zwfis, the narrative fair value of US$105.25 sits well above PayPal's last close at US$58.51, which sets up a very different story to the market price.

PayPal at its surface might not seem like the fanciest option available; however, as you take a deeper dive into the company it has a lot more to offer than just the app we use for transactions and sending money to others. Most of their revenue comes from transactions, while they also source some revenue from other added value services like:

Read the complete narrative.

Curious how a payments app turns into a higher fair value story? This narrative leans on richer transaction economics, expanding services and a premium profit margin profile. Want to see which growth and valuation levers really carry the model?

Result: Fair Value of $105.25 (UNDERVALUED)

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

However, this hinges on PayPal turning user engagement into profitable growth. Any stumble in Venmo monetization or merchant adoption could quickly challenge that upside story.

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

Build Your Own PayPal Holdings Narrative

If you look at the numbers and story here and see things differently, you can stress test the assumptions yourself and build a tailored view in just a few minutes, then 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.

Looking for more investment ideas?

If PayPal has caught your attention, do not stop here; broaden your watchlist with ideas that match your style and could sharpen your next move.

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.