Is PayPal Holdings, Inc. (PYPL) A Good Stock To Buy Now?

Is PYPL a good stock to buy? We came across a bullish thesis on PayPal Holdings, Inc. on William’s Substack by William Fleming-Daniels. In this article, we will summarize the bulls’ thesis on PYPL. PayPal Holdings, Inc.'s share was trading at $44.16 as of May 26th. PYPL’s trailing and forward P/E were 8.29 and 8.32 respectively according to Yahoo Finance.

PayPal Holdings, Inc. operates a technology platform that enables digital payments for merchants and consumers worldwide. PYPL reported Q1 2026 earnings under new CEO Enrique Lores, delivering a headline beat on revenue, EPS, and TPV, yet the stock sold off sharply as investors focused on margin compression and weaker forward guidance. Revenue of $8.35B and non-GAAP EPS of $1.34 beat expectations, while TPV grew 11% year over year, signaling underlying platform resilience despite operating margin compression to 17.8% and transaction margin falling to 45.6%, a multi-year low.

Importantly, PayPal is undergoing a structural reset under Lores, who has reorganized the company into three focused segments and launched a $1.5B cost savings program aimed at restoring operating leverage and unlocking profitability. The digital payments leader also benefits from strong cash generation, producing over $6B in annual free cash flow and executing ~$6B in share buybacks, reducing share count by nearly 8% year over year and amplifying EPS growth even in a low-growth environment.

Despite near-term uncertainty, the valuation appears disconnected from fundamentals, with PayPal trading at roughly 8.7x forward earnings and offering a ~15% combined shareholder yield, significantly below payment peers such as Visa and Mastercard. The base case valuation implies a $60 price target, representing approximately 32% upside from current levels, with additional upside toward $87 in a bull scenario driven by successful cost execution and potential segment re-rating.

Lores’ early actions, including the Venmo standalone reorganization, NFL partnership, and accelerated cost-cutting initiative, reinforce a more disciplined and shareholder-focused operating strategy that could drive a meaningful re-rating over the next 12–24 months going forward.

Previously, we covered a bullish thesis on PayPal Holdings, Inc. (PYPL) by Sergey in May 2025, which highlighted strong earnings growth, AI-driven payments expansion, Venmo acceleration, and improving transaction margins. PYPL's stock price has depreciated by approximately 33.41% since our coverage. William Fleming-Daniels shares a similar view but emphasizes valuation compression, margin reset, and cost-cutting under new leadership, highlighting re-rating potential and shareholder yield upside.

PayPal Holdings, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 76 hedge fund portfolios held PYPL at the end of the first quarter which was 78 in the previous quarter. While we acknowledge the risk and potential of PYPL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PYPL and that has 10,000% upside potential, check out our report about this cheapest AI stock.