PYPL · Forward model · Bear case

The Bear case, 20 quarters out

Model as of 2026-08-27

Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.

PayPal operates as ONE reportable segment - the 10-Q's Note 15 says the CODM manages the business on consolidated net income - so the only revenue decomposition with dollars attached is the two-category split used here: Transaction revenues and Revenues from other value added services. Both lines are disclosed in the release's Net Revenues by Type table and in the 10-Q disaggregation note, and they sum to reported net revenues with zero residual in all 21 quarters carried here (2021 Q2 - 2026 Q2, assembled from five Q2 releases with four overlap quarters that agreed to the dollar). The deck's channel view - branded experiences 31% of TPV, PSP 45%, P2P and other consumer 27%, Venmo 19% - is TPV only, carries no revenue, and overlaps by construction, so it is NOT used as a revenue split. What is disclosed: both revenue lines, TPV, the transaction take rate, transaction margin dollars, interest on customer balances, volume-based expense, capex, shares, cash and debt. What is assumed: the allocation of volume-based expense between the two lines (constrained to reconcile to the disclosed $3,900M total), every forward growth and drift rate, and the exit multiple. The engine holds share count flat at 882M weighted-average diluted shares; PayPal is guided to repurchase $6B in 2026 and retired 111M shares over the trailing year, so the per-share figures here are deliberately conservative and do not capture the buyback. Corporate overhead is held at a constant 24.7% of revenue: management guides FY2026 non-transaction operating expense to grow 7-8% while the $1.5B savings programme is GROSS run-rate and arrives over two to three years, so a flat ratio is the mid-path between the two and neither takes the savings as a step down nor ignores them. Free cash flow here is taxed EBITDA less capex and prints about $5.0B annualised against the $6B+ of guided adjusted free cash flow, which strips out loan-origination timing this model does not carry.

Where each case comes from

From cash flow to fair value

The projected path

The published model's 20 quarters. The horizon and sliders above do not change this table.

Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.

Model revisions

Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.