When PayPal (PYPL 4.92%) reported its first-quarter financial results on April 27, one important number stood out: The electronic-payments giant processed a whopping $323 billion in total payment volume (TPV) during the quarter, up 13% year over year. 

While revenue and user growth for this top fintech company have slowed from the pandemic-fueled pace of the past few years, that TPV figure is still a gargantuan amount. And it underscores the increasing importance of PayPal in the world of e-commerce and digital payments. 

Person online shopping from a tablet device.

Image source: Getty Images.

PayPal is the digital-payments trailblazer 

Despite ongoing headwinds like inflation, the tough comparison to Q1 2021 (when people received government stimulus checks), the return of in-person shopping, and eBay's transition away from PayPal, the business was still able to process a large and growing amount of payments through its network. This is something anxious shareholders and bearish investors should keep in mind. 

After posting TPV of $1.25 trillion in 2021, management estimates it will clear $1.4 trillion this year. That seems likely, given that PayPal now has 429 million active accounts, of which 35 million are merchants. And engagement, as measured by transactions per active account (over the trailing 12-month period), was up 11% year over year to 47. 

If we take a step back, we have a clear picture of just how much PayPal has been thriving. From 2015 through 2021, the business increased the number of transactions on its platform from 5.1 billion to 19.3 billion. TPV surged from $288 billion to $1.25 trillion. Net revenue grew from $9.2 billion to $25.4 billion, and free cash flow tripled to $5.4 billion. 

This track record makes it difficult to overstate the company's success. PayPal is accepted at 76% of the 1,500 largest online merchants in North America and Europe, easily making it the most ubiquitous digital wallet by a wide margin. The business possesses an incredibly powerful brand recognized for speed and security, which should benefit it for a long time.

PayPal stock looks like a buy 

In addition to total payment volume, there's one more key reason to like PayPal stock right now. Because shares have fallen over 70% since reaching an all-time high last July, they now trade at a price-to-earnings (P/E) ratio of just 26. That's the lowest multiple PayPal has sold for since the company's spin-off from eBay in July 2015. For a company leading the digital-payments revolution with a superb financial profile, massive user base, and strong brand, this looks like an attractive investment opportunity.  

What's more, Wall Street seems to be optimistic as well. Consensus analyst estimates for diluted earnings per share call for compound annual growth of 17.9% from 2021 through 2026. If we assume the P/E multiple of 25 remains the same in five years' time, the projected return is likely to trounce the S&P 500. 

Like most companies today, PayPal is battling an extremely uncertain economic environment. Its prospects, however, still look solid.