PYPL
PayPal Holdings
Platform / Network
★ Quality 56/100Price today
$55.83
what the market pays
Worth
$84.22
calculated cycle value
Price is 34% below its value
charlieapp.co
Unusually large discount. A gap this wide usually means the market is pricing in a risk (AI disruption, for example) that the model does not penalise. A contrarian opportunity: high upside, but high risk — not an obvious one.
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Digital platform
PayPal · Venmo · Braintree
$86.22
per share
How it's calculated
C10 ACTIVE: CAGR 4% vs 18% historical — multiple penalized. FCFeco $6.73 × 15x = $99. Aggressive buybacks $6B/year (-5.8% shares). GMV $2T. Take rate 1.86% stable. Highest platform MoS in model. Undervalued <$79.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Platform / Network · vs 27 peers
You pay 10.1x times this business's cash flow; its sector median is 28.5x.
49% below what Charlie thinks it's worth (15x) — that gap is your safety margin.
Why Undervalued?
Its free cash flow is $5.75/share × 15.0x multiplier minus $2.00 in negative net cash = $84.22 in intrinsic value. Today's price of $55.83 is 51% below that value — there's a real safety margin to enter.
The price is 34% below the calculated value. There's a real safety margin.
The model asks for a discount to absorb estimate errors. That cushion is here.
If the business disappoints a little, the price should hold near $67.38.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$67.38
-20% off Value
🟡 Discounted
≤$80.01
-5% off Value
🟢 Today
$55.83
+51% Valor
Undervalued
Today's price offers a real discount to the calculated value. For the long run, this is the kind of entry that builds wealth.
“Price is what you pay. Value is what you get.”
— Warren Buffett
Model updated · July 2026
The business
Charges a tiny toll on every online payment, two trillion times over.
PayPal moves money between buyers and sellers online, and keeps ~1.86% of every transaction. It processes about $2 trillion a year in payments (GMV) across PayPal, Venmo, and Braintree. Its revenue is almost all fees: the more e-commerce flows through its pipes, the more it collects.
The network is worth its two sides: hundreds of millions of user accounts and millions of merchants that accept the button. Nobody wants to be the first to leave. But Apple Pay, Stripe, and others erode that habit year after year — the moat exists, though it's narrowing.
Revenue history
From $25.4B to $33.2B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $33.2B · FY2025
Of every $100 in sales, $84 goes to costs and operations; $16 is left as net profit (16% margin).
Catalysts and risks
Buybacks of ~$6 billion a year that cut shares by nearly 5.8% annually.
Venmo starting to truly monetize its user base.
Stabilization of the take rate (fee per transaction) at 1.86%.
Growth slowed to ~4% a year versus the 18% historical — the market no longer pays for stories.
Apple Pay and Stripe eating into its checkout share.
No real monopoly: the fee can compress if competition tightens.
Charlie's note
“A good business trading at 15 times its cash flows, punished for growing 4% instead of the 18% of before. You pay for a network that still collects on every click while buying back nearly 6% of itself a year; the question isn't whether it's solid, but whether it stopped growing forever or just took a nap.”
Analysis · July 2026
So when would be a good price for PayPal Holdings?
Today it trades below what we calculate. If you want us to tell you when that changes —or when the value itself moves because the company reported— we will email you.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.