Is PYPL a good stock to buy? We came across a bullish thesis on PayPal Holdings, Inc. on High Growth Investing’s Substack by Stefan Waldhauser. In this article, we will summarize the bulls’ thesis on PYPL. PayPal Holdings, Inc.’s share was trading at $44.90 as of March 13th. PYPL’s trailing and forward P/E were 8.30 and 8.53 respectively according to Yahoo Finance.
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PayPal Holdings, Inc. operates a technology platform that enables digital payments for merchants and consumers worldwide. PYPL experienced a dramatic market reaction on February 3, 2026, when it announced a surprise CEO change and issued disappointing guidance for 2026. Enrique Lores, previously CEO of HP Inc. and Chairman of PayPal’s board, is set to become CEO on March 1, 2026, with Jamie Miller serving as interim CEO until then.
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The board’s decision reflects concerns over the pace of execution under former CEO Alex Chriss, particularly in the high-margin branded checkout segment, where growth has slowed and competition from Apple Pay and others has intensified. Q4 2025 results, while slightly below analyst expectations, were not catastrophic: PayPal reported $8.68 billion in revenue (+4%), $475 billion in total payment volume (+9%), $4.03 billion in transaction margin dollars (+3%), and $2.2 billion in free cash flow. Full-year 2025 revenue reached $33.17 billion (+4%) with $5.6 billion in free cash flow.
The market, however, focused on the forward outlook, which signals stagnation in core payment volumes and a modest decline in transaction revenue, prompting a sharp 20% drop in share price and reducing market capitalization below $40 billion. Despite the selloff, PayPal remains highly profitable, with substantial cash flow and $6 billion earmarked for share repurchases in 2026. At the current valuation, the company trades at an enterprise value to free cash flow multiple of approximately 6, implying distressed pricing.
If the new CEO can stabilize the branded checkout business while maintaining cash generation, the stock has significant upside potential. Additionally, strategic interest from major players like Elon Musk’s xAI or OpenAI could provide optionality. With a combination of undervalued fundamentals, strong cash flows, and potential catalysts, PayPal presents a compelling turnaround investment opportunity below $42.
Previously, we covered a bullish thesis on PayPal Holdings, Inc. (PYPL) by Sergey in April 2025, highlighting strong execution, Venmo and BNPL growth, AI integration, and $6 billion in buybacks. PYPL’s stock price has depreciated by approximately 32.29% since our coverage, reflecting investor concerns around growth quality, margin dilution from mix shifts, and increasing competition despite strong fundamentals. Stefan Waldhauser shares a similar view but emphasizes the CEO change, weak 2026 guidance, and near-term branded checkout challenges, framing a potential turnaround opportunity.
