Shares of mobile payment leader PayPal Holdings (PYPL 0.34%) have surrendered 49% of their value year to date, thanks to a broader sell-off linked to stubbornly high inflation and rising interest rates. Macro headwinds, in addition to company-related issues like eBay's (EBAY 0.88%) transition to a different payments platform, has led to less-than-ideal growth for the financial technology (fintech) giant of late.

But I expect PayPal's business to spring back in a major way. Not only does the company hold 50.3% of the online payments processing market, but it also continues to broaden its business with service offerings such as Venmo -- a leading peer-to-peer payment platform -- and buy-now-pay-later (BNPL), an up-and-coming concept that allows consumers to pay for items in an equal number of installments over a set period of time.

With all that in mind, let's have a look at PayPal's present state to help investors gauge whether the stock is worth their time today.  

Person sitting at desk looking at stock data on three monitors.

Image source: Getty Images.

Let's focus on the fundamentals 

PayPal delivered its second-quarter earnings digest after hours on Aug. 2, sparking a much-needed rebound in its stock price. The company's total sales rose 9.1% year over year to $6.8 billion, finishing in-line with Wall Street estimates, and its adjusted earnings per share declined 19.1% to $0.93 but managed to top consensus forecasts by 6.6%.

Meanwhile, its total payment volume (TPV) was $339.8 billion, growing 9.3% from a year ago. The company also added 400,000 new accounts to bring its total up to 429 million.

PayPal's growth in the quarter was fine, but it certainly wasn't flawless. During the earnings call, Chief Executive Officer Dan Schulman stated that eBay payment transition caused a 400-basis-point drag on top-line growth in Q2. But on the bright side, he also noted that the effect should fall to 100 basis points next quarter and be negligible from there on out.

eBay previously signed an agreement with Adyen, a global payment processor, to serve as its primary payments processing partner, seizing the position from PayPal. As a result, the digital payments company is currently facing growing pains, but it should be in good shape once eBay is fully out of the picture. Ex-eBay revenue growth has been consistently north of 20%.  

Schulman also discussed the company's aim to reduce its cost structure through leveraging its massive scale to drive cost reductions across its supplier base. In 2022, it expects to reduce costs by $900 million across operating and transaction expense categories, and in 2023, it's forecasting an additional $1.3 billion in savings.

That's not to say PayPal isn't in a healthy financial position already -- the company has $8.3 billion in cash and short-term investments, and it generated $1.3 billion in free cash flow (FCF) in Q2 alone. That translates to 21.9% growth year over year. Even after its fresh surge, PayPal still trades at 29 times earnings, representing a major discount from its five-year average price-to-earnings multiple of 57.2. In other words, investors shouldn't feel like they're too late to the game to buy shares.    

Should investors shell out for PayPal today?

PayPal is a steadfast investment right now for patient, long-term investors. In many ways, I can understand the steady fallback we've been seeing with fintech companies, as it's very common for investors to dump speculative stocks during times of economic uncertainty.

But PayPal is different -- the fintech juggernaut not only commands a large chunk of the budding mobile payments market, but it's also highly profitable and consistently generates FCF. That doesn't sound like a speculative investment to me, yet investors continue to punish the company in such a manner. Pair that with its all-time low valuation, and PayPal appears like a fantastic investment opportunity today.