Q1 results and business reset put PayPal in focus

PayPal Holdings (PYPL) recently reported Q1 2026 results that exceeded expectations for revenue and adjusted EPS, while unveiling a three unit structure around PayPal, Venmo, and crypto, alongside broader product and capital markets moves.

Despite the Q1 beat and the business reset around PayPal, Venmo, and crypto, the stock trades at US$45.04 with the share price down 22.53% year to date and the 1-year total shareholder return down 36.73%. At the same time, a 90-day share price return of 11.79% suggests only a recent pickup in momentum.

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With flat net income growth, a softer share price over 1 and 5 years, and a reported 64% intrinsic discount, the key question is whether PayPal is mispriced value or whether the market already anticipates limited future growth.

Most Popular Narrative: 45.1% Undervalued

PayPal's most followed narrative on Simply Wall St, according to WealthAP, places fair value at $82 per share versus the current $45.04, framing a wide valuation gap for investors to assess.

The withdrawal of the bank charter application undoubtedly stings, as it removes a lever for potential margin expansion. However, it also removes a massive anchor, Capital Intensity.

The narrative leans heavily on PayPal's ability to generate cash without tying up equity in bank-style reserves, and on monetising its large user base through asset light products rather than balance sheet lending.

Result: Fair Value of $82 (UNDERVALUED)

However, the thesis still faces real tests, including weaker net income growth and any regulatory or competitive hit to PayPal’s high margin, asset light products.

Next Steps

With sentiment clearly split between risk and reward, this is the moment to review the data directly and act promptly to form an independent view using 3 key rewards and 1 important warning sign

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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.