SHOP vs PYPL

For growth investors, Shopify Inc.

(SHOP) is the stronger pick with 30. 1% revenue growth year-over-year, versus 4. 3% for PayPal Holdings, Inc. (PYPL). PayPal Holdings, Inc. (PYPL) offers the better valuation at 8. 6x trailing P/E (8. 8x forward), making it the more compelling value choice. Analysts rate Shopify Inc. (SHOP) a "Buy" — based on 63 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, PayPal Holdings, Inc.

(PYPL) is the cheapest at 8. 6x versus Shopify Inc. at 114. 5x. On forward P/E, PayPal Holdings, Inc. is actually cheaper at 8. 8x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: PayPal Holdings, Inc. wins at 0. 99x versus Shopify Inc. 's 2. 00x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Shopify Inc.

(SHOP) delivered a total return of -3. 9%, compared to -81. 1% for PayPal Holdings, Inc. (PYPL). Over 10 years, the gap is even starker: SHOP returned +36. 7% versus PYPL's +20. 1%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), PayPal Holdings, Inc.

(PYPL) is the lower-risk stock at 1. 39β versus Shopify Inc. 's 2. 64β — meaning SHOP is approximately 89% more volatile than PYPL relative to the S&P 500. On balance sheet safety, Shopify Inc. (SHOP) carries a lower debt/equity ratio of 1% versus 49% for PayPal Holdings, Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Shopify Inc.

(SHOP) is pulling ahead at 30. 1% versus 4. 3% for PayPal Holdings, Inc. (PYPL). On earnings-per-share growth, the picture is similar: PayPal Holdings, Inc. grew EPS 35. 6% year-over-year, compared to -39. 4% for Shopify Inc.. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

PayPal Holdings, Inc.

(PYPL) is the more profitable company, earning 15. 8% net margin versus 10. 7% for Shopify Inc. — meaning it keeps 15. 8% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: PYPL leads at 18. 3% versus 12. 7% for SHOP. At the gross margin level — before operating expenses — SHOP leads at 48. 1%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, PayPal Holdings, Inc. (PYPL) is the more undervalued stock at a PEG of 0. 99x versus Shopify Inc. 's 2. 00x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, PayPal Holdings, Inc. (PYPL) trades at 8. 8x forward P/E versus 58. 7x for Shopify Inc. — 49. 9x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for SHOP: 53. 1% to $164. 75.

In this comparison, PYPL (0.

3% yield) pays a dividend. SHOP does not pay a meaningful dividend and should not be held primarily for income.

For long-horizon retirement investors, PayPal Holdings, Inc.

(PYPL) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding. Shopify Inc. (SHOP) carries a higher beta of 2. 64 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (PYPL: +20. 1%, SHOP: +36. 7%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

These companies operate in different sectors (SHOP (Technology) and PYPL (Financial Services)), which means they face different economic cycles, regulatory environments, and macro sensitivities — making direct comparison nuanced.

In terms of investment character: SHOP is a mid-cap high-growth stock; PYPL is a mid-cap deep-value stock. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.