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PayPal Holdings Inc PYPL

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Morningstar’s Analysis

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PayPal Continues to Benefit From Tailwinds in First Quarter

Brett Horn, CFA Senior Equity Analyst

Analyst Note

| Brett Horn, CFA |

As expected, PayPal had a good first quarter. The company continued its streak of strong top-line growth and saw some margin improvement. While PayPal is close to ideally situated for the current moment and we appreciate the narrow-moat franchise’s strengths, we continue to think the company may face a more competitive environment over the long run. Given the dramatic rise of the stock since the start of the pandemic, we think the market is too focused on the near-term tailwinds. We will maintain our $139 per share fair value estimate.

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Company Profile

Business Description

PayPal was spun off from eBay in 2015 and provides electronic payment solutions to merchants and consumers, with a focus on online transactions. The company had 377 million active accounts at the end of 2020, including 29 million merchant accounts. The company also owns Xoom, an international money transfer business, and Venmo, a person-to-person payment platform.

2211 North First Street
San Jose, CA, 95131
T +1 408 967-1000
Sector Financial Services
Industry Credit Services
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 26,500