Is PayPal Holdings, Inc. overvalued or undervalued?

As of 2 September 2025, the valuation grade for PayPal Holdings, Inc. has moved from attractive to very attractive. The company is currently undervalued, supported by a P/E ratio of 18, an EV to EBITDA of 11.88, and a PEG ratio of 0.91, all of which indicate favorable valuation metrics compared to its peers. In comparison, Visa, Inc. has a P/E ratio of 30.36, while Mastercard, Inc. is significantly more expensive with a P/E of 58.32.
Despite the positive valuation indicators, PayPal's stock has underperformed relative to the S&P 500, with a year-to-date return of -19.72% compared to the index's 12.22%. This trend continues over longer periods, with a 3-year return of -27.11% versus the S&P 500's 70.41%, suggesting that while the stock may be undervalued, it has faced significant challenges in the market.