PayPal HoldingsBSP:PYPL34 -0.37%72 Operating Margin % is 18.70% as of Mar. 2026, which is 14% above its 10-year median of 16.41. GuruFocus rates BSP:PYPL34 with a GF Score™ of 72/100 and a GF Value™ of R$21.16 (Significantly Undervalued). The stock has 4 warning signs investors should review. Among 412 Credit Services companies, PayPal Holdings ranks better than 51.46% on this metric.
PayPal Holdings Inc operating margin is expanding. Margin expansion is usually a good sign.
The historical rank and industry rank for PayPal Holdings's Operating Margin % or its related term are showing as below:
BSP:PYPL34'
s Operating Margin % Range Over the Past 10 Years
Min: 14.63 Med: 16.41 Max: 19.28
Current: 18.86
BSP:PYPL34's Operating Margin % is ranked better than 51.46% of 412
companies
in the Credit Services industry
Industry Median: 17.325
vs BSP:PYPL34: 18.86
PayPal Holdings's 5-Year Average Operating Margin % Growth Rate was 3.60% per year.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
PayPal Holdings Operating Margin % Related Terms
PayPal Holdings Operating Margin % Historical Data
* Premium members only.
The historical data trend for PayPal Holdings's Operating 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.
BSP:PYPL34 vs AFRM, SYF, SOFI: Operating Margin % Comparison
For the Credit Services subindustry, PayPal Holdings's Operating Margin %, along with its competitors' market caps and Operating 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 Operating Margin % vs Credit Services Industry
For the Credit Services industry and Financial Services sector, PayPal Holdings's Operating Margin % distribution charts can be found below:
* The bar in red indicates where PayPal Holdings's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
PayPal Holdings's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* 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.
PayPal Holdings (BSP:PYPL34) has a Operating Margin % of 18.70% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on PayPal Holdings and its competitors. This is 14% above median its historical median of 16.41. Over the past decade, PayPal Holdings' Operating Margin % has ranged from 14.63 to 19.28. According to the industry distribution chart, PayPal Holdings ranks #200 out of 412 companies in the Credit Services industry, placing it in the top 48.5%.
Is PayPal Holdings' Operating Margin % too high?
PayPal Holdings' current Operating Margin % of 18.70% is 14% above median its 10-year median of 16.41. Over the past 10 years, this metric has ranged from a low of 14.63 to a high of 19.28. The Credit Services industry median Operating Margin % is 17.33. PayPal Holdings' value of 18.70% is 7.9% above this industry median. Based on the distribution chart, PayPal Holdings ranks #200 out of 412 companies in the Credit Services industry, which is above the industry midpoint. Overall, PayPal Holdings has a GF Score™ of 72/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does PayPal Holdings' Operating Margin % compare to AFRM and SYF?
According to the Credit Services industry distribution chart, PayPal Holdings ranks #200 out of 412 companies for Operating Margin %. This puts PayPal Holdings in the upper half of its industry. The industry median Operating Margin % is 17.33. PayPal Holdings' value of 18.70% is 7.9% above this benchmark. Historically, PayPal Holdings' own Operating Margin % has ranged from 14.63 to 19.28 over the past decade. While the company's 10-year median is 16.41 vs. the industry median of 17.33, PayPal Holdings has consistently been above 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 Operating Margin % for a Credit Services company?
The median Operating Margin % among Credit Services companies is 17.33, based on 412 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. PayPal Holdings's current Operating Margin % of 18.70% is 7.9% above 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 Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on PayPal Holdings and its competitors. For the Credit Services industry, the median Operating Margin % is 17.33 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. PayPal Holdings's current Operating Margin % is 18.70%, which is 14% above median its own 10-year median of 16.41. 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 (BSP:PYPL34) is currently considered Significantly Undervalued. The stock's GF Value™ is R$21.16, compared to a current price of R$10.84 — trading 48.8% below its estimated fair value. The current Operating Margin % is 18.70%, which is 14% above median its 10-year median of 16.41 and 7.9% above the Credit Services industry median of 17.33. PayPal Holdings' overall GF Score™ is 72/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For PayPal Holdings (BSP:PYPL34), the current Operating Margin % is 18.70% 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 (BSP:PYPL34) Overvalued in 2026?
Based on GuruFocus' analysis, PayPal Holdings stock appears to be undervalued.
The current stock price of R$10.84 is trading 48.8% below its estimated GF Value™ of R$21.16.
GuruFocus considers PayPal Holdings to be Significantly Undervalued.
Key valuation signals for BSP:PYPL34:
Operating Margin %: 18.70% (14% above median its 10-year median of 16.41)
GF Value™: R$21.16 vs. price of R$10.84 (48.8% below fair value)
Industry Position: 7.9% above the Credit Services median (#200 of 412)
No single metric tells the full story. See the BSP:PYPL34 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.
72GF Score
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