PayPal HoldingsCHIX:2PPD 77 Return-on-Tangible-Equity is 49.63% as of Mar. 2026, which is 40% above its 10-year median of 35.35. GuruFocus rates CHIX:2PPD with a GF Score™ of 77/100 and a GF Value™ of €73.48 (Significantly Undervalued). The stock has 4 warning signs investors should review. Among 525 Credit Services companies, PayPal Holdings ranks better than 95.62% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. PayPal Holdings's annualized net income for the quarter that ended in Mar. 2026 was €3,851 Mil. PayPal Holdings's average shareholder tangible equity for the quarter that ended in Mar. 2026 was €7,759 Mil. Therefore, PayPal Holdings's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2026 was 49.63%.
The historical rank and industry rank for PayPal Holdings's Return-on-Tangible-Equity or its related term are showing as below:
CHIX:2PPd'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 14.17 Med: 35.35 Max: 56.76
Current: 56.1
During the past 13 years, PayPal Holdings's highest Return-on-Tangible-Equity was 56.76%. The lowest was 14.17%. And the median was 35.35%.
CHIX:2PPd's Return-on-Tangible-Equity is ranked better than 95.62% of 525
companies
in the Credit Services industry
Industry Median: 7.01
vs CHIX:2PPd: 56.10
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
PayPal Holdings Return-on-Tangible-Equity Related Terms
PayPal Holdings Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for PayPal Holdings's Return-on-Tangible-Equity 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: Return-on-Tangible-Equity Comparison
For the Credit Services subindustry, PayPal Holdings's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Credit Services Industry
For the Credit Services industry and Financial Services sector, PayPal Holdings's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where PayPal Holdings's Return-on-Tangible-Equity 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 49.63% mean?
PayPal Holdings (CHIX:2PPD) has a Return-on-Tangible-Equity of 49.63% as of Mar. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on PayPal Holdings and its competitors. This is 40% above median its historical median of 35.35. Over the past decade, PayPal Holdings' Return-on-Tangible-Equity has ranged from 14.17 to 56.76. According to the industry distribution chart, PayPal Holdings ranks #23 out of 525 companies in the Credit Services industry, placing it in the top 4.4%.
Is PayPal Holdings' Return-on-Tangible-Equity too high?
PayPal Holdings' current Return-on-Tangible-Equity of 49.63% is 40% above median its 10-year median of 35.35. Over the past 10 years, this metric has ranged from a low of 14.17 to a high of 56.76. The Credit Services industry median Return-on-Tangible-Equity is 7.01. PayPal Holdings' value of 49.63% is 608% above this industry median. Based on the distribution chart, PayPal Holdings ranks #23 out of 525 companies in the Credit Services industry, which is in the top quartile — a strong position relative to peers. 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' Return-on-Tangible-Equity compare to AFRM and SYF?
According to the Credit Services industry distribution chart, PayPal Holdings ranks #23 out of 525 companies for Return-on-Tangible-Equity. This places PayPal Holdings in the top 4% of its industry — outperforming the majority of peers. The industry median Return-on-Tangible-Equity is 7.01. PayPal Holdings' value of 49.63% is 608% above this benchmark. Historically, PayPal Holdings' own Return-on-Tangible-Equity has ranged from 14.17 to 56.76 over the past decade. While the company's 10-year median is 35.35 vs. the industry median of 7.01, 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 Return-on-Tangible-Equity for a Credit Services company?
The median Return-on-Tangible-Equity among Credit Services companies is 7.01, based on 525 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. PayPal Holdings's current Return-on-Tangible-Equity of 49.63% is 608% 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 Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on PayPal Holdings and its competitors. For the Credit Services industry, the median Return-on-Tangible-Equity is 7.01 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. PayPal Holdings's current Return-on-Tangible-Equity is 49.63%, which is 40% above median its own 10-year median of 35.35. 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 €73.48, compared to a current price of €38.20 — trading 48% below its estimated fair value. The current Return-on-Tangible-Equity is 49.63%, which is 40% above median its 10-year median of 35.35 and 608% above the Credit Services industry median of 7.01. 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 Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For PayPal Holdings (CHIX:2PPD), the current Return-on-Tangible-Equity is 49.63% 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% below its estimated GF Value™ of €73.48.
GuruFocus considers PayPal Holdings to be Significantly Undervalued.
Key valuation signals for CHIX:2PPD:
Return-on-Tangible-Equity: 49.63% (40% above median its 10-year median of 35.35)
GF Value™: €73.48 vs. price of €38.20 (48% below fair value)
Industry Position: 608% above the Credit Services median (#23 of 525)
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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