PayPal Holdings, Inc. (PYPL): A Bull Case Theory

We came across a bullish thesis on PayPal Holdings, Inc. on Let it Compound’s Substack. In this article, we will summarize the bulls’ thesis on PYPL. PayPal Holdings, Inc.'s share was trading at $74.17 as of July 18^th. PYPL’s trailing and forward P/E were 16.67 and 15.13, respectively according to Yahoo Finance.

PayPal remains a central player in the digital payments ecosystem, benefiting from long-term structural shifts toward a cashless economy and mobile-first commerce. With active accounts rising from 162 million in 2014 to 434 million in 2024 and transactions per user more than doubling, PayPal has deeply embedded itself into consumers’ financial lives.

The company’s portfolio, including Venmo, Braintree, Xoom, and Buy Now Pay Later offerings, coupled with strategic partnerships with Visa, Mastercard, Amazon, Shopify, and others, continues to strengthen its two-sided network of merchants and consumers. PayPal’s scale generates invaluable data, reinforcing security and fraud prevention while supporting financial inclusion initiatives and ESG commitments like 100% renewable energy use in data centers by 2023.

Financially, PayPal has demonstrated resilience with revenue tripling to $31.8 billion over the past decade, total payment volume reaching $1.68 trillion, and free cash flow growing to $6.8 billion in 2024, providing capital for reinvestment and shareholder returns. While operating margins have moderated, management has emphasized profitable growth through “Transaction Margin Dollars.” Executive compensation remains performance-linked, with strong clawback provisions and alignment with shareholder interests.

Valuation analyses, applying peer multiples, imply a market capitalization of $79.5–$88 billion, suggesting current trading levels already reflect PayPal’s robust positioning but leave room for upside if profitability expands and user growth reaccelerates. Risks remain, including intensifying competition, regulatory complexity, funding mix shifts, fraud, and operational dependencies, but PayPal’s scale, brand trust, and innovation pipeline underpin its enduring value. For long-term investors, PayPal offers a “Hold” or “Cautious Buy” opportunity with solid fundamentals and optionality for future growth.

Previously, we covered a bullish thesis on PayPal Holdings, Inc. (PYPL) by Sergey in May 2025, which highlighted disciplined execution, AI integration, and strong momentum across Venmo, BNPL, and value-added services supporting margin expansion. The company’s stock price has appreciated approximately 12% since our coverage as execution remained strong. The thesis still stands as structural growth drivers persist. Let it Compound shares a similar view but emphasizes PayPal’s resilient fundamentals and valuation-driven upside.

PayPal Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 92 hedge fund portfolios held PYPL at the end of the first quarter which was 94 in the previous quarter. While we acknowledge the potential of PYPL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None.