Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin19.3%
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin12.5%
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Financial Health
B
Years to Pay Off Debt12.6 yrs
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt$1.7B
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital$12.7B
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Valuation
F
Margin of Safety0.0%
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book2.53x
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Cash Flow
A
Free Cash Flow$1.4B
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income15.0%
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings$1.5B
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
About PayPal Holdings, Inc.
PayPal Holdings, Inc. operates a technology platform that enables digital payments for merchants and consumers worldwide. The company operates a two-sided network at scale that connects merchants and consumers that enables its customers to connect, transact, and send and receive payments through online and in person, as well as transfer and withdraw funds using various funding sources, such as bank accounts, PayPal or Venmo account balance, consumer credit and debit products, credit and debit cards, and cryptocurrencies, as well as other stored value products, including gift cards and eligible rewards. It provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Hyperwallet, Honey, and Paidy names. The company was founded in 1998 and is headquartered in San Jose, California.
PayPal Holdings, Inc. operates a technology platform that enables digital payments for merchants and consumers worldwide. The company operates a two-sided network at scale that connects merchants and consumers that enables its customers to connect, transact, and send and receive payments through online and in person, as well as transfer and withdraw funds using various funding sources, such as bank accounts, PayPal or Venmo account balance, consumer credit and debit products, credit and debit cards, and cryptocurrencies, as well as other stored value products, including gift cards and eligible rewards. It provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Hyperwallet, Honey, and Paidy names. The company was founded in 1998 and is headquartered in San Jose, California.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Margin of Safety
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Mr. Market is currently offering PayPal Holdings, Inc. at $59.24.
The business passes only 3 of 6 of Graham's defensive criteria — well below his required standard.
At $59.24, the stock trades at a 131% premium to its Graham Number of $25.68. Graham would consider this price speculative.
There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..
Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.
Showing Key Metrics
Income Highlights
Metric
Q3 2026
Q4 2025
Gross Profit %
46.0%▼
46.5%
Operating Margin %
19.3%▲
18.3%
Net Income %
12.5%▼
16.6%
Diluted EPS
1.25▼
1.53
Balance Sheet Highlights
Metric
Q3 2026
Q4 2025
Total Assets
$81.6B
$80.2B
Total Debt
$13.5B▲
$10.0B
Working Capital
$12.7B▼
$13.3B
Years to Pay Debt
12.56
6.95
Cash Flow Highlights
Metric
Q3 2026
Q4 2025
Free Cash Flow
$1.4B▼
$2.2B
Owner Earnings
$1.5B
$1.9B
CapEx % of Net Income
15.0%
13.5%
Income Statement
2026
2025
Tax Effect Of Unusual Items
-57,420
1,518
Tax Rate For Calcs
0
0
Normalized EBITDA
2,024,000
1,959,000
Total Unusual Items
-261,000
13,000
Total Unusual Items Excluding Goodwill
-261,000
13,000
Net Income From Continuing Operation Net Minority Interest
1,073,000
1,437,000
Reconciled Depreciation
251,000
234,000
Reconciled Cost Of Revenue
4,634,000
4,642,000
EBITDA
1,763,000
1,972,000
EBIT
1,512,000
1,738,000
Net Interest Income
-13,000
7,000
Interest Expense
138,000
111,000
Interest Income
125,000
118,000
Normalized Income
1,276,580
1,425,518
Net Income From Continuing And Discontinued Operation
1,073,000
1,437,000
Total Expenses
6,927,000
7,085,000
Total Operating Income As Reported
1,402,000
1,511,000
Diluted Average Shares
858,000
939,000
Basic Average Shares
849,000
931,000
Diluted EPS
0
0
Basic EPS
0
0
Diluted NI Availto Com Stockholders
1,073,000
1,437,000
Net Income Common Stockholders
1,073,000
1,437,000
Net Income
1,073,000
1,437,000
Net Income Including Noncontrolling Interests
1,073,000
1,437,000
Net Income Continuous Operations
1,073,000
1,437,000
Tax Provision
301,000
190,000
Pretax Income
1,374,000
1,627,000
Other Income Expense
-270,000
29,000
Other Non Operating Income Expenses
-9,000
16,000
Special Income Charges
-255,000
-80,000
Restructuring And Mergern Acquisition
255,000
80,000
Gain On Sale Of Security
-6,000
93,000
Net Non Operating Interest Income Expense
-13,000
7,000
Interest Expense Non Operating
138,000
111,000
Interest Income Non Operating
125,000
118,000
Operating Income
1,657,000
1,591,000
Operating Expense
2,293,000
2,443,000
Other Operating Expenses
434,000
446,000
Research And Development
831,000
804,000
Selling General And Administration
1,028,000
1,193,000
Selling And Marketing Expense
508,000
691,000
General And Administrative Expense
520,000
502,000
Other Gand A
520,000
502,000
Gross Profit
3,950,000
4,034,000
Cost Of Revenue
4,634,000
4,642,000
Total Revenue
8,584,000
8,676,000
Operating Revenue
8,584,000
8,676,000
Balance Sheet
2026
2025
Treasury Shares Number
423,000
Ordinary Shares Number
837,000
920,000
Share Issued
837,000
1,343,000
Net Debt
6,312,000
1,938,000
Total Debt
13,472,000
9,987,000
Tangible Book Value
8,361,000
9,184,000
Invested Capital
32,955,000
30,243,000
Working Capital
12,659,000
13,316,000
Net Tangible Assets
8,361,000
9,184,000
Common Stock Equity
19,483,000
20,256,000
Total Capitalization
30,422,000
30,243,000
Total Equity Gross Minority Interest
19,483,000
20,256,000
Stockholders Equity
19,483,000
20,256,000
Gains Losses Not Affecting Retained Earnings
-486,000
-658,000
Other Equity Adjustments
-486,000
-658,000
Treasury Stock
37,680,000
33,138,000
Retained Earnings
35,384,000
32,470,000
Additional Paid In Capital
22,265,000
21,582,000
Total Liabilities Net Minority Interest
62,139,000
59,917,000
Total Non Current Liabilities Net Minority Interest
14,249,000
13,474,000
Other Non Current Liabilities
3,310,000
3,487,000
Long Term Debt And Capital Lease Obligation
10,939,000
9,987,000
Long Term Debt
10,939,000
9,987,000
Current Liabilities
47,890,000
46,443,000
Current Debt And Capital Lease Obligation
2,533,000
Current Debt
2,533,000
Payables And Accrued Expenses
45,357,000
46,443,000
Current Accrued Expenses
4,281,000
6,005,000
Payables
41,076,000
40,438,000
Accounts Payable
41,076,000
40,438,000
Total Assets
81,622,000
80,173,000
Total Non Current Assets
21,073,000
20,414,000
Other Non Current Assets
3,461,000
3,312,000
Investments And Advances
4,785,000
4,330,000
Other Investments
1,733,000
1,909,000
Investmentin Financial Assets
3,052,000
2,421,000
Available For Sale Securities
3,052,000
2,421,000
Goodwill And Other Intangible Assets
11,122,000
11,072,000
Other Intangible Assets
154,000
208,000
Goodwill
10,968,000
10,864,000
Net PPE
1,705,000
1,700,000
Accumulated Depreciation
-8,114,000
Gross PPE
9,814,000
Leases
357,000
Construction In Progress
34,000
Machinery Furniture Equipment
9,083,000
Land And Improvements
340,000
Current Assets
60,549,000
59,759,000
Other Current Assets
1,824,000
1,827,000
Receivables
48,445,000
47,510,000
Loans Receivable
9,305,000
8,472,000
Accounts Receivable
39,140,000
39,038,000
Cash Cash Equivalents And Short Term Investments
10,280,000
10,422,000
Other Short Term Investments
3,120,000
2,373,000
Cash And Cash Equivalents
7,160,000
8,049,000
Cash Flow
2026
2025
Free Cash Flow
1,431,000
2,190,000
Repurchase Of Capital Stock
-1,501,000
-1,501,000
Repayment Of Debt
-451,000
-201,000
Issuance Of Debt
437,000
400,000
Issuance Of Capital Stock
0
43,000
Capital Expenditure
-161,000
-194,000
Interest Paid Supplemental Data
18,000
196,000
Income Tax Paid Supplemental Data
195,000
66,000
End Cash Position
20,089,000
24,018,000
Beginning Cash Position
21,973,000
23,853,000
Effect Of Exchange Rate Changes
9,000
28,000
Changes In Cash
-1,893,000
137,000
Financing Cash Flow
-2,490,000
-1,949,000
Cash Flow From Continuing Financing Activities
-2,490,000
-1,949,000
Net Other Financing Charges
-857,000
-560,000
Cash Dividends Paid
-118,000
Common Stock Dividend Paid
-118,000
Net Common Stock Issuance
-1,501,000
-1,458,000
Common Stock Payments
-1,501,000
-1,501,000
Common Stock Issuance
0
43,000
Net Issuance Payments Of Debt
-14,000
199,000
Net Long Term Debt Issuance
-14,000
199,000
Long Term Debt Payments
-451,000
-201,000
Long Term Debt Issuance
437,000
400,000
Investing Cash Flow
-995,000
-298,000
Cash Flow From Continuing Investing Activities
-995,000
-298,000
Net Other Investing Changes
177,000
438,000
Net Investment Purchase And Sale
-1,013,000
-542,000
Sale Of Investment
4,569,000
3,906,000
Purchase Of Investment
-5,582,000
-4,448,000
Net Business Purchase And Sale
0
Purchase Of Business
0
Net PPE Purchase And Sale
-159,000
-194,000
Sale Of PPE
2,000
0
Purchase Of PPE
-161,000
-194,000
Operating Cash Flow
1,592,000
2,384,000
Cash Flow From Continuing Operating Activities
1,592,000
2,384,000
Change In Working Capital
-95,000
495,000
Change In Other Working Capital
-378,000
246,000
Change In Other Current Liabilities
171,000
Change In Other Current Assets
121,000
Change In Payables And Accrued Expense
-55,000
10,000
Change In Payable
-55,000
10,000
Change In Account Payable
-55,000
10,000
Change In Receivables
46,000
133,000
Changes In Account Receivables
46,000
133,000
Other Non Cash Items
41,000
-17,000
Stock Based Compensation
233,000
210,000
Amortization Of Securities
-2,000
-6,000
Deferred Tax
85,000
124,000
Deferred Income Tax
85,000
124,000
Depreciation Amortization Depletion
251,000
234,000
Depreciation And Amortization
251,000
234,000
Operating Gains Losses
6,000
-93,000
Gain Loss On Investment Securities
6,000
-93,000
Net Income From Continuing Operations
1,073,000
1,437,000
📊Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.
Quarter vs Same Quarter Last Year
YoY strips seasonality
Revenue Growth (YoY)
Prior year: $8.4B▲ $8.6B+2.0%
Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.
Gross Margin
Prior year: 46.0%▲ 46.0%+0.0pp
Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.
Operating Margin
Prior year: 19.7%▲ 19.3%-0.4pp
Graham: operating margin reflects true business economics before financing. Trend matters as much as level.
Net Margin
Prior year: 14.8%▼ 12.5%-2.3pp
Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.
Quarterly Health Checks
3 Graham/Buffett criteria that are valid and reliable on quarterly data
✅ Adequate Size
Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.
$8.6B/qtr (≈$34.3B ann.)
vs > $1.5B annualised revenue
❌ Financial Condition
Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.
1.26x current ratio
vs ≥ 2.0x
✅ Free Cash Flow
Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.
$1.4B
vs Positive
Operating Cash Flow
$1.6B
Latest quarter · Buffett's cash reality check
ROIC
3.9%
Based on latest annual operating income
Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.
Market Cap / Net Assets
2.5x
Net Assets: $19.5B
Peers & Industry
No auto-detected peers for Credit Services. You can manually compare PYPL against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
0.73%
Low — management has little skin in the game
Return on Equity (ROE)
5.5%
Weak — poor returns on equity
Return on Assets (ROA)
1.3%
Poor — assets are not generating adequate returns
Share Buybacks (Latest Year)
$6.1B
Management is returning capital to shareholders via buybacks
Debt Trend YoY
+0.5% YoY
Debt is roughly stable
Leadership Team
Enrique Lores
President, CEO & Director
Age 59
Pay: $167,534
0.016% of net income
Jamie Miller
Chief Financial & Operating Officer and Executive VP
Age 56
Pay: $1,934,206
0.180% of net income
Frank Keller
President of Checkout Solutions & PayPal
Age 51
Pay: $1,766,568
0.165% of net income
Suzan Bulyaba Kereere
President of Global Markets
Age 59
Pay: $1,766,568
0.165% of net income
Top Institutional Holders
Institution
% Owned
Shares
Blackrock Inc.
9.02%
74,965,012
Vanguard Capital Management LLC
6.46%
53,624,311
State Street Corporation
4.96%
41,228,833
Invesco Ltd.
4.03%
33,444,420
Geode Capital Management, LLC
3.54%
29,372,478
Comprehensive Financial Management, LLC
2.88%
23,950,118
Vanguard Portfolio Management LLC
2.73%
22,656,267
Bank of America Corporation
2.72%
22,592,936
Risk Analysis
Beta (Market Risk)
1.32
Moderate volatility — moves slightly more than market
Short Interest
3.7% of float
Low short interest — market is not heavily bearish
Debt-to-Equity
0.73x
Conservative balance sheet — low financial risk
Current Ratio
1.26x
Adequate liquidity
52-Week Price Range
Low: $38.46Current: $59.24High: $67.99
Currently at 70% of 52-week range
PayPal Holdings, Inc. (PYPL) fundamental analysis — Overall grade C based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: $25.68. Margin of safety: 0%. Gross profit margin: 46.0%. Operating margin: 19.3%. Net margin: 12.5%. Market cap: $49.2B. Sector: Financial Services. Industry: Credit Services. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
Disclaimer: 360investing is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. All data is sourced from public third-party providers
and may be delayed, inaccurate, or incomplete. Past performance is not indicative of future results. Analysis, scores, and valuations are algorithmic and do not represent professional investment recommendations. Always conduct your own due
diligence and consult a qualified financial adviser before making any investment decision. Use of this tool constitutes acceptance that 360investing and its operators bear no liability for decisions made based on information presented here.