Value
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.3 |
| P/S | 9.5 |
| EV/EBITDA | 8.0 |
| Fwd P/E | 9.6 |
| PEG | 8.1 |
| Analyst target | 5.0 |
- ▸Forward P/E: 7.9x
- ▸PEG: 0.82
- ▸Attractively valued
PYPL · Why this verdict
Why PayPal Holdings (PYPL) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
PayPal trades at a forward P/E of 7.4x with a PEG of 0.77, generates a 25% return on equity, and earns a Piotroski F-Score of 7/9, providing a combination of earnings quality and valuation that implies a 47% margin of safety relative to analyst consensus targets. Valuation breakdown | Forward P/E expands above 10x within 18 months as earnings growth accelerates and the discount narrows. | →Stable |
| CounterA PEG of 0.77 requires earnings growth to materialize; with revenue growth near flat and overall growth score of 2.5/10, the earnings growth needed to justify expansion may not arrive on schedule. | ||
PayPal beat analyst estimates in 3 of the last 4 quarters with an average surprise of 5%, demonstrating consistent execution in a competitive payments environment despite the narrative headwinds from competition. Earnings | Earnings beats continue in at least 3 of the next 4 quarters with average positive surprise above 3%. | →Stable |
| CounterThe one miss in February 2026 at -4.4% and the modest average surprise of 5% indicate that execution is only marginally above consensus, with limited buffer against any cost pressure or transaction volume softness. | ||
The 200-day moving average slope is -6.7% per month, among the steepest confirmed downtrends in the covered universe, and the stock is near 52-week lows with RSI at 41, indicating significant technical headwinds that fundamental value alone may not overcome in the near term. Momentum breakdown | The 200-day moving average slope improves to less than -3% per month within 6 months, signaling trend stabilization. | →Stable |
| CounterVolume accumulation (rising OBV) while the price falls is a classic divergence that often precedes trend reversal in large-cap technology-adjacent companies with strong balance sheets. | ||
A put/call ratio of 9.73 is an extreme hedging or bearish positioning signal, indicating that options market participants are overwhelmingly positioned for downside, which combined with high implied volatility of implied levels suggests the market is pricing in a risk event that has not yet been resolved. Options | Put/call ratio falls below 3.0 within 6 months as the downtrend resolves and hedging demand normalizes. | →Stable |
| CounterExtreme put/call ratios in large-cap financial technology companies often reflect institutional hedging of large long positions rather than directional bets, and such extreme readings historically precede short-term contrarian bounces. | ||
PayPal trades at a forward P/E of 7.4x with a PEG of 0.77, generates a 25% return on equity, and earns a Piotroski F-Score of 7/9, providing a combination of earnings quality and valuation that implies a 47% margin of safety relative to analyst consensus targets.
→StableValuation breakdown
- Expectation
- Forward P/E expands above 10x within 18 months as earnings growth accelerates and the discount narrows.
CounterA PEG of 0.77 requires earnings growth to materialize; with revenue growth near flat and overall growth score of 2.5/10, the earnings growth needed to justify expansion may not arrive on schedule.
PayPal beat analyst estimates in 3 of the last 4 quarters with an average surprise of 5%, demonstrating consistent execution in a competitive payments environment despite the narrative headwinds from competition.
→StableEarnings
- Expectation
- Earnings beats continue in at least 3 of the next 4 quarters with average positive surprise above 3%.
CounterThe one miss in February 2026 at -4.4% and the modest average surprise of 5% indicate that execution is only marginally above consensus, with limited buffer against any cost pressure or transaction volume softness.
The 200-day moving average slope is -6.7% per month, among the steepest confirmed downtrends in the covered universe, and the stock is near 52-week lows with RSI at 41, indicating significant technical headwinds that fundamental value alone may not overcome in the near term.
→StableMomentum breakdown
- Expectation
- The 200-day moving average slope improves to less than -3% per month within 6 months, signaling trend stabilization.
CounterVolume accumulation (rising OBV) while the price falls is a classic divergence that often precedes trend reversal in large-cap technology-adjacent companies with strong balance sheets.
A put/call ratio of 9.73 is an extreme hedging or bearish positioning signal, indicating that options market participants are overwhelmingly positioned for downside, which combined with high implied volatility of implied levels suggests the market is pricing in a risk event that has not yet been resolved.
→StableOptions
- Expectation
- Put/call ratio falls below 3.0 within 6 months as the downtrend resolves and hedging demand normalizes.
CounterExtreme put/call ratios in large-cap financial technology companies often reflect institutional hedging of large long positions rather than directional bets, and such extreme readings historically precede short-term contrarian bounces.
TrendMatrix Research · core thesis
Engine thesis — one sentence
PayPal combines a forward P/E of 7.4x, PEG of 0.77, 25% return on equity, and a 3-of-4 earnings beat streak with 47% margin of safety versus analyst targets, but is constrained by weak revenue growth, a confirmed downtrend in the 200-day moving average, and an extreme put/call ratio of 9.73.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.4 |
| ROA | 3.2 |
| Gross margin | 4.2 |
| Op margin | 7.2 |
| Net margin | 7.5 |
| Current ratio | 4.8 |
| FCF quality | 6.0 |
| Moat | 6.9 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 25%
- ▸Strong Piotroski F-Score: 7/9
Growth
2.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.3 |
| EPS growth | 0.8 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 1.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -6.5%/30d — confirmed downtrend
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.2 |
| Analyst rating | 5.0 |
| Price target | 7.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $896,056 (0.002% of mkt cap)
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.9 |
| quality rank | 5.1 |
| growth rank | 3.3 |
Technical
2.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.7 |
| support resistance | 0.8 |
| 52w position | 1.4 |
| gap | 6.0 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.6 |
| days to cover | 7.1 |
| volatility | 4.0 |
| put call | 8.7 |
| implied vol | 5.5 |
| beta | 5.7 |
| debt equity | 7.5 |
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 5.0 |
| dividend safety | 6.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 123.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:22d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.5<1.5@spot
Warning (2)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.46
Upside
+5.0%
Downside
10.8%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 65
EdgeCatalyst-Driven — Earnings in 22d with 3/4 beat streak
SuitabilitySpeculative — Drawdown -43% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 5.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.5<1.5@spot) reinforce the read. Current asymmetry R:R is 0.46 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.1, Risk (lower is worse) at 6.4, and Quality at 6.2; the weakest are Technical at 2.2, Growth at 2.5, and Insider at 5.0. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.46 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Value And Buyback Quality
Trip ifForward P/E contracts below 5x following earnings estimate cuts of more than 25%.
- P2Earnings Beat Consistency
Trip ifEPS surprise falls below -5% in at least 2 of the next 4 quarters.
- P3Downtrend Below 200ma
Trip ifThe 200-day moving average slope remains below -5% per month for more than 90 consecutive days.
- P4Elevated Put Call Ratio
Trip ifPut/call ratio rises above 15.0 on increasing open interest for more than 30 consecutive days.