What Is PayPal Really Worth? Piper Sandler Sees Value Beyond Checkout Amid Stripe-Advent Bid

• The target hike followed reports that the payments company is in discussions with Stripe and Advent International regarding a takeover. 
• Latest updates indicate that PayPal views the group's initial $60.50 per share proposal as insufficient and is negotiating a potentially higher price. 
• The analyst said that it views the latest development as a potential strategic validation of PayPal's asset base beyond branded checkout.

PayPal Holdings Inc. (PYPL) drew attention from retail investors on Stocktwits after Piper Sandler raised its price target to $59 from $42 and maintained a ‘Neutral’ rating on the shares. 

The target hike followed reports that the payments company is in discussions with Stripe and Advent International regarding a takeover. 

In July, reports emerged that Stripe and Advent International were pursuing an acquisition of PayPal, touted as being valued at more than $53 billion.

Piper Sandler Says PayPal Has More Value

Latest updates indicate that PayPal views the group's initial $60.50 per share proposal as insufficient and is negotiating a potentially higher price. 

The analyst said that it views the latest development as a potential strategic validation of PayPal's asset base beyond branded checkout, including its consumer wallet, Venmo ecosystem, financial-services distribution, global licenses, risk infrastructure, and credit capabilities.

Expert Thinks The Deal Has ‘Zero’ Economic Incentive

Nelson M. Rangel, Chief Investment Officer at Raven Capital B.V., said last week in a post on X that Paypal shareholders have “ZERO  economic incentive” to engage in buyout discussions with Stripe or Advent below $110 per share. 

“Rejecting them would in fact open the door for the most bullish case,” he said, adding that it would lead to the acceleration of PYPL’s intrinsic value growth over the next 12 months. 

Rangel outlined a case where PYPL stock would drop back to $50 after the buyout offer below $110 per share is rejected. The company would then continue to execute buybacks at a current pace of $6 billion per annum, acquiring about 120 million shares. 

“The lower the stock goes the more powerful buybacks become. Since the company is a cashflow machine that creates a flywheel by which market pessimism increases Intrinsic Value per share,” he said. 

The investment officer also added that management would likely continue the turnaround plan at the current pace, execute shift into financial services and realize cost savings, leading to delivering an earnings per share of $6.20, and free cash flow of $6 billion in FCF. 

“At 13x that puts the company share price at $80.6 in 12 months. Add a $25 control premium to that for any buyer that appears then and Paypal shareholders are at $105/ share. And this does not take into account any additional buybacks or business growth after year 1. $110 is the fair buyout price for Stripe/Advent to pay now for Paypal shareholders to relinquish a bright future,” he said. 

“We know Advent cannot pay that because their PE math begins to fall apart. Stripe needs to go solo or find better financing if it does not want to miss this strategic opportunity. Paypal Shareholders do not support selling the company below intrinsic value and Paypal shareholders should not be asked to subsidize Advent’s return requirements,” he added. 

PYPL Stock: Retail Stance

On Stocktwits, retail sentiment around PYPL stock improved from ‘neutral’ to ‘bullish’ over 24 hours even as message volumes jumped by 229%. 

One user said, “$PYPL if stripe is paying 10b for openrouter than they should be willing to pay 100b for paypal.”

Earlier in the week, reports emerged that Stripe had finalized an agreement to acquire OpenRouter, a unified API gateway and marketplace for large language models, for more than $7 billion. Initial reports indicated a price of $10 billion. 

Another user said, “$PYPL I’d love too a bidding war!  At this point, Trump could make a bid and it wouldn’t surprise me.”

PYPL stock is up about 4% year-to-date. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.