NASDAQ:PYPL: good value for what you're paying.

Last update: Jan 29, 2024

Our stock screening tool has identified PAYPAL HOLDINGS INC (NASDAQ:PYPL) as an undervalued gem with strong fundamentals. NASDAQ:PYPL boasts decent financial health and profitability while maintaining an attractive price point. We'll break it down further.

Exploring NASDAQ:PYPL's Valuation

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:PYPL has achieved a 7 out of 10:

PYPL's Price/Earnings ratio is a bit cheaper when compared to the industry. PYPL is cheaper than 66.99% of the companies in the same industry.
PYPL is valuated cheaply when we compare the Price/Earnings ratio to 26.02, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 11.03, which indicates a very decent valuation of PYPL.
Based on the Price/Forward Earnings ratio, PYPL is valued a bit cheaper than the industry average as 67.96% of the companies are valued more expensively.
PYPL is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.32, which is the current average of the S&P500 Index.
Based on the Enterprise Value to EBITDA ratio, PYPL is valued a bit cheaper than 75.73% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PYPL is valued a bit cheaper than 63.11% of the companies in the same industry.
PYPL's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PYPL has a very decent profitability rating, which may justify a higher PE ratio.
PYPL's earnings are expected to grow with 14.67% in the coming years. This may justify a more expensive valuation.

Profitability Insights: NASDAQ:PYPL

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:PYPL has earned a 7 out of 10:

PYPL has a better Return On Assets (4.93%) than 78.64% of its industry peers.
The Return On Equity of PYPL (19.07%) is better than 82.52% of its industry peers.
PYPL has a Return On Invested Capital of 10.45%. This is amongst the best in the industry. PYPL outperforms 87.38% of its industry peers.
The 3 year average ROIC (8.61%) for PYPL is below the current ROIC(10.45%), indicating increased profibility in the last year.
PYPL's Profit Margin of 12.93% is fine compared to the rest of the industry. PYPL outperforms 66.99% of its industry peers.
The Operating Margin of PYPL (16.47%) is better than 60.19% of its industry peers.
PYPL has a Gross Margin of 40.20%. This is in the better half of the industry: PYPL outperforms 66.02% of its industry peers.

Exploring NASDAQ:PYPL's Health

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:PYPL has earned a 5 out of 10:

Looking at the Altman-Z score, with a value of 1.90, PYPL is in the better half of the industry, outperforming 71.84% of the companies in the same industry.
The Debt to FCF ratio of PYPL is 3.34, which is a good value as it means it would take PYPL, 3.34 years of fcf income to pay off all of its debts.
PYPL's Debt to FCF ratio of 3.34 is fine compared to the rest of the industry. PYPL outperforms 70.87% of its industry peers.
PYPL's Quick ratio of 1.30 is fine compared to the rest of the industry. PYPL outperforms 60.19% of its industry peers.

How We Gauge Growth for NASDAQ:PYPL

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:PYPL scores a 6 out of 10:

The Earnings Per Share has grown by an impressive 21.75% over the past year.
Measured over the past years, PYPL shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.68% on average per year.
Measured over the past years, PYPL shows a quite strong growth in Revenue. The Revenue has been growing by 16.01% on average per year.
PYPL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.39% yearly.
PYPL is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.22% yearly.

More Decent Value stocks can be found in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of PYPL

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.