PayPal Holdings (PYPL) is back in focus after being removed from the Russell Top 200 indices and simultaneously added to the Russell Midcap and Midcap Value benchmarks, reshaping which index funds hold the stock.

The latest reshuffle across the Russell indices comes after a weak run for PayPal Holdings, with the stock at US$43.18 and a share price return that is down 25.73% year to date and a 1 year total shareholder return that is down 42.93%. This suggests momentum has been fading despite product updates around advertising and stablecoin payments.

If PayPal's story has you rethinking where growth might come from next, it can be helpful to look across digital payments and adjacent technologies using the 19 cryptocurrency and blockchain stocks.

With PayPal Holdings trading at US$43.18 after a series of index reshuffles, yet screens flagging a wide gap to some estimated fair value metrics, you have to ask: is this genuine mispricing or is the market already discounting future growth?

Most Popular Narrative: 28% Undervalued

PayPal Holdings is priced at $43.18 against a narrative fair value of $60. According to ValueInvestingSubstack, that gap rests on a turnaround story with tightly defined risk and upside.

At this point, we are left with a company that is in the middle of a turnaround which could or could not materialize. The possibilities are bleak, past management has tried and failed to rehabilitate the company, the business is a conglomerate of melting ice cubes, and there are even rumors that it may be scrapped and sold for parts. It really could go one way or another, and for most people the risk of a binary event is just too much for their taste.

Want to see what turns that bleak setup into a $60 narrative fair value for PayPal Holdings? The engine here is a specific mix of earnings power, revenue assumptions and margin resilience that paints a very different long term picture from the last five years.

Result: Fair Value of $60 (UNDERVALUED)

However, PayPal Holdings still faces real pressure if Branded Checkout keeps losing share or if the options market starts to reprice volatility and long dated calls become more expensive.

Next Steps

Given the mix of concern and optimism around PayPal Holdings, it makes sense to move quickly, inspect the underlying data, and reach your own view using the 3 key rewards and 1 important warning sign

Looking for more investment ideas beyond PayPal Holdings?

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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.