Being the first and now the largest digital payment processor in the world, PayPal Holdings Inc. (PYPL -1.14%) has made investors a lot of money. Shortly after its initial public offering, the company was acquired by eBay (EBAY 0.31%) in 2002, then spun off in 2015. Since then, PayPal has been operating as its own entity.

While facing its fair set of challenges, including a 66% fall over the last year, PayPal has still managed to perform admirably for investors. Its 162% total return would have not only outperformed the S&P 500 but also turned a $1,000 investment in 2015 into $2,391 today. 

Right now, PayPal is trading near its lowest price in history -- around 36% less than its price-to-earnings ratio (P/E) from its 2015 spinoff. Does its low valuation mean investors should buy PayPal stock now and expect it to deliver similar returns over the next seven years? Let's find out.

The rise and fall of PayPal over the past few years

After making its second debut in 2015, PayPal's share price rose more than 635% to its peak in July 2021. This impressive growth was fueled by a spike in online shopping during the global pandemic leading to 35% to 40% year-over-year revenue growth.

However, after a few lackluster quarters due to less online shopping as the world recovered from the pandemic and management overpromising on PayPal's targets, its stock-price started falling. The tech stock market crash in March 2022 and concerns over a recession's impact on the payment processor followed shortly thereafter. Then its Q2 2022 earnings report showed the first net loss since PayPal's eBay spinoff, eventually leading share prices to fall close to 75% from their July 2021 peak.

Is now a good time to buy PayPal?

Right now PayPal is trading at its lowest price-to-sales valuation since 2015. The fintech company, which usually trades upward of 200 to 500 times its P/E, is trading at 55 times its price-to-earnings today. Simply put -- its pricing has never been this low.

But a low price doesn't necessarily mean investors are in for great returns. For that, we have to look at both how the company is faring today and its growth opportunities in the coming years. 

Slowed spending and tight margins due to higher investment costs for newer products like its buy now, pay later services and cryptocurrency trading have pushed its earnings per share (EPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA) down over the last year. Fortunately, its free cash flow and revenue are both up, and active users also increased by 6%.

The company is forecasting some challenges as consumer spending slows over the next few years, which means its share-price growth might now be outstanding over the next two to three years. But its cost-saving initiatives which were announced in Q2 2022 could help turn things around, particularly if it reinvests that money into planned growth opportunities.

It's also worth noting that investors shouldn't discount the fact that PayPal is still the largest and most profitable digital payment processing company in the world. With its share price being at its lowest level since 2015, there's a strong chance PayPal will follow the trajectory it made over the last seven years in the decade to come. It may just take time to get there.