MeritValue

PayPal Holdings, Inc.

PYPLdata completeness 100%13 fiscal years on file
The thesis, from the filings

PayPal Holdings, Inc. earns about 19% on equity, far above its ~9% cost of capital, and has bought back 18% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $44.63 and $92.4 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$25.4B1$27.5B2$29.8B3$31.8B3$33.2B3
Net income$4.17B4$2.42B5$4.25B6$4.15B6$5.23B6
Operating cash flow$5.8B7$5.81B8$4.84B9$7.45B9$6.42B9
Capital expenditure$908M10$706M11$623M12$683M12$852M12
Free cash flow (derived)$4.89B7$5.11B8$4.22B9$6.77B9$5.56B9
Total debt$8.05B13$10.4B14$9.68B15$9.88B16$9.99B16
Cash & equivalents$5.2B17$7.78B18$9.08B19$6.66B19$8.05B19
Diluted shares1.19B1.16B1.11B1.04B968.0M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$209.26
your share of equity
Profit it earned you last year
$54.06
Free cash flow it threw off
$57.48
Debt you’d be carrying
$103.17

10 shares is a claim on $209.26 of net worth that earned you $54.06 and generated $57.48 of cash last year, against $103.17 of debt.

iii. Is this a good business?
Moat signal · return on equity
19% avg · 5y
FY21 19%FY22 12%FY23 20%FY24 20%FY25 26%

It earned about 19% on equity, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−18% shares · 5y

Share count is down 18% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 24% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $44.63 and $92.4 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$92.4
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth2.9%
  • fcfBase$5.56B
DCF · Growth Exit 5Y
$91.2
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth2.9%
  • fcfBase$5.56B
Earnings Power Value
$44.63
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$4.17B
  • growthAssumed0.0%
Graham Number
$50.47
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years2.9%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $91.2
The three cases
Bear0.0%$80.12
Base2.9%$91.2
Bull7.9%$113.28

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 2.9%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001633917-24-000024 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001633917-25-000019 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001633917-26-000024 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0001633917-24-000024 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001633917-25-000019 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001633917-26-000024 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001633917-24-000024 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001633917-25-000019 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001633917-26-000024 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001633917-24-000024 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001633917-25-000019 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001633917-26-000024 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001633917-23-000033 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-31 · accession 0001633917-24-000024 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0001633917-25-000019 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-31 · accession 0001633917-26-000024 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-12-31 · accession 0001633917-24-000024 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001633917-25-000019 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001633917-26-000024 (CashAndCashEquivalentsAtCarryingValue)