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PayPal Holdings, Inc. (PYPL) is currently a compelling choice among the value stocks of 2025, driven by its strong fundamentals and attractive valuation. In the fintech world where there are many high-growth but volatile players, this payments giant offers stability, profitability, and hidden potential.
In this article, we analyze the key factors putting PayPal among the top value stocks, from the financials to the strategic moves, as of April 1, 2025.
PayPal's finances replicate its value proposition. In Q4 2024, it posted revenue of $8.37 billion, a 4.2% year-over-year increase, and beat expectations by 1.2%. Its earnings per share were $1.12, $0.07 above expectations, and its total payment volume was $437.8 billion, a rise of 6.8%.
Free cash flow was $2.1 billion, 53% higher than guidance, driven by a 45.8% transaction margin. These figures represent consistent profitability, with fiscal 2025 estimates at $5.02 per share, setting a forward P/E ratio of 13.54, well below the S&P 500 average of 22. These figures represent an undervalued stock to grow long-term.
Return of capital plans also makes PayPal more appealing. A $15 billion share buyback plan approved in 2024 is 17% of its market capitalization in early 2025. Buying back $6 billion of shares in the year will reduce outstanding shares and thus could increase earnings per share 10-15%.
The move is a sign of faith in intrinsic value, especially with the stock price in March 2025 at $81, from a peak in 2021 of $310. History is that buybacks at lower prices, like the current price, are followed by big bounces, so it is something value investors should consider.
Along with valuation, the company's growth plan holds out the promise of a revival on the horizon. Brand checkout, ever the top-line growth engine, drove mid-to-high single-digit transaction dollar margins across 2024, accelerating in the U.S. during Q4. Clean checkout flows are in position in front of more than 25% of U.S. traffic today, saving 40% in latency and boosting conversion by 1%.
Buy Now, Pay Later (BNPL) processed $33 billion in 2024, 21% year over year, as customers spent 30% more per transaction. Introductions like Fastlane, a one-tap checkout process, and PayPal Everywhere, an omnichannel push, connect to a $200 trillion addressable market, more than two times the present $500 billion payment volume. The moves place the company on a trajectory to capture a bigger share of the digital payments pie.
CEO Alex Chriss' 2023 start has led PayPal towards innovation and efficiency. Cost control efforts led to double-digit free cash flow growth in 2024, ending previous stagnation. Active accounts, falling to 434 million in late 2024, stabilized, ending a multi-year slide.
Chriss' ‘platform company’ premise uses artificial intelligence to augment user profiles and merchant functionality, such as improved targeted ads rolled out in 2025. Longleaf Partners Fund analysts refer to this reversal, and a 20%+ EPS growth goal by 2027, which could make PayPal a multi-bagger if executed properly, marrying value with growth potential.
Challenges still weigh on the bull thesis. Apple Pay, Google Pay, and fintech newcomers such. Block (SQ) challenge branded checkout dominance, a threat that results in a 10% share decline following Q4 victories. Regulation headwinds on online payments and recession-prone macro can temper growth in the value of transactions.
Peer relative valuations have Adyen on 70x forward P/E, while PayPal's 13.54x reflects market skepticism. However, its $84 billion market cap and dominance of a 200-country network create a moat that others cannot breach.
Analyst opinions are bullish, with 15 of 27 giving PayPal a Buy and 12 a Hold through March 2025, with no Sells. The $97 consensus price target implies a 23% gain from $81, supported by positive revisions of $0.12 to 2025 estimates in 60 days.
Zacks has it ranked #2 (Buy) with an A Value Style Score, referencing a PEG ratio of 1.09, below its five-year average of 1.97. X comments similarly, referring to the stock's below-14x earnings multiple and $6 billion cash flow as signs of undervaluation.
PayPal (PYPL) mixes vintage value traits; low P/E, high cash flow, and buybacks, with growth levers like BNPL and AI tools. Its vision for 2025 is built on scaling innovations and outcompeting others, but the financial underpinning and strategic transformation point to a stock poised to recover. Value investors seeking undervaluation with upside discover a one-of-a-kind combination here, as fundamentals reflect more brightly than sentiment.
