PayPal HoldingsCHIX:2PPD 77 Gross Margin % is 45.61% as of Mar. 2026, which is 16% below its 10-year median of 54.47. GuruFocus rates CHIX:2PPD with a GF Score™ of 77/100 and a GF Value™ of €74.77 (Significantly Undervalued). The stock has 4 warning signs investors should review. Among 388 Credit Services companies, PayPal Holdings ranks worse than 55.93% on this metric.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
PayPal Holdings had a gross margin of 45.61% for the quarter that ended in Mar. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
PayPal Holdings Gross Margin % Related Terms
PayPal Holdings Gross Margin % Historical Data
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The historical data trend for PayPal Holdings's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
CHIX:2PPD vs AFRM, SYF, SOFI: Gross Margin % Comparison
For the Credit Services subindustry, PayPal Holdings's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
PayPal Holdings Gross Margin % vs Credit Services Industry
For the Credit Services industry and Financial Services sector, PayPal Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where PayPal Holdings's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
PayPal Holdings (CHIX:2PPD) has a Gross Margin % of 45.61% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on PayPal Holdings and its competitors. This is 16% below median its historical median of 54.47. Over the past decade, PayPal Holdings' Gross Margin % has ranged from 46.03 to 59.10. According to the industry distribution chart, PayPal Holdings ranks #217 out of 388 companies in the Credit Services industry, placing it in the top 55.9%.
Is PayPal Holdings' Gross Margin % too high?
PayPal Holdings' current Gross Margin % of 45.61% is 16% below median its 10-year median of 54.47. Over the past 10 years, this metric has ranged from a low of 46.03 to a high of 59.10. The Credit Services industry median Gross Margin % is 51.85. PayPal Holdings' value of 45.61% is 12% below this industry median. Based on the distribution chart, PayPal Holdings ranks #217 out of 388 companies in the Credit Services industry, which is below the industry midpoint. Overall, PayPal Holdings has a GF Score™ of 77/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does PayPal Holdings' Gross Margin % compare to AFRM and SYF?
According to the Credit Services industry distribution chart, PayPal Holdings ranks #217 out of 388 companies for Gross Margin %. This places PayPal Holdings in the lower half of its industry. The industry median Gross Margin % is 51.85. PayPal Holdings' value of 45.61% is 12% below this benchmark. Historically, PayPal Holdings' own Gross Margin % has ranged from 46.03 to 59.10 over the past decade. While the company's 10-year median is 54.47 vs. the industry median of 51.85, PayPal Holdings has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Credit Services company?
The median Gross Margin % among Credit Services companies is 51.85, based on 388 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. PayPal Holdings's current Gross Margin % of 45.61% is 12% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on PayPal Holdings and its competitors. For the Credit Services industry, the median Gross Margin % is 51.85 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. PayPal Holdings's current Gross Margin % is 45.61%, which is 16% below median its own 10-year median of 54.47. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is PayPal Holdings stock overvalued right now?
Based on GuruFocus' analysis, PayPal Holdings (CHIX:2PPD) is currently considered Significantly Undervalued. The stock's GF Value™ is €74.77, compared to a current price of €38.20 — trading 48.9% below its estimated fair value. The current Gross Margin % is 45.61%, which is 16% below median its 10-year median of 54.47 and 12% below the Credit Services industry median of 51.85. PayPal Holdings' overall GF Score™ is 77/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For PayPal Holdings (CHIX:2PPD), the current Gross Margin % is 45.61% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is PayPal Holdings (CHIX:2PPD) Overvalued in 2026?
Based on GuruFocus' analysis, PayPal Holdings stock appears to be undervalued.
The current stock price of €38.20 is trading 48.9% below its estimated GF Value™ of €74.77.
GuruFocus considers PayPal Holdings to be Significantly Undervalued.
Key valuation signals for CHIX:2PPD:
Gross Margin %: 45.61% (16% below median its 10-year median of 54.47)
GF Value™: €74.77 vs. price of €38.20 (48.9% below fair value)
Industry Position: 12% below the Credit Services median (#217 of 388)
No single metric tells the full story. See the CHIX:2PPD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
PayPal was spun off from eBay in 2015 and provides electronic payment solutions to merchants and consumers, with a focus on online transactions. The company had 439 million active accounts at the end of 2025. The company also owns Venmo, a person-to-person payment platform.
77GF Score
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