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​PayPal Holdings, Inc. (NASDAQ:PYPL) is one of the Most Undervalued High Quality Stocks to Buy Now. The company posted its fiscal Q1 2026 earnings on May 5. During the quarter, it posted $8.35 billion in revenue, up 7.21% year-over-year and ahead of expectations by $296.78 million. However, the GAAP EPS of $1.21 fell short of the expectations by $0.03.

​Although the Total Payment Volume rose 11% at spot rates to $464 billion, the payment transactions per active account decreased 1% on a trailing 12-month basis. Looking ahead, management expects low single-digit revenue growth for Q2 2026 and a low single-digit decline in transaction margin dollars. The full year 2026 guidance was reiterated at a year-over-year flat transaction margin dollars and 3% growth in non-transaction operating expense.

​Following the release, on May 6, Robert W. Baird lowered the price target on PayPal Holdings, Inc. (NASDAQ:PYPL) from $52 to $50, while keeping a Hold rating. On the same day, Monness also reiterated a Hold rating on the stock with a $50 price target. Robert W. Baird noted updating the firm’s updated model following the Q1 results, which led to a reduced price target on the stock.

​PayPal Holdings Inc. (NASDAQ:PYPL) operates a technology platform that enables digital payments for merchants and consumers worldwide. The company operates a two-sided network at scale that connects merchants and consumers.

While we acknowledge the potential of PYPL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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