For those who appreciate growth without the sticker shock, NASDAQ:PYPL is worth considering.

Last update: Feb 13, 2024

Our stock screener has spotted PAYPAL HOLDINGS INC (NASDAQ:PYPL) as a growth stock which is not overvalued. NASDAQ:PYPL is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Evaluating Growth: NASDAQ:PYPL

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:PYPL, the assigned 7 reflects its growth potential:

PYPL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.73%, which is quite impressive.
PYPL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.12% yearly.
The Revenue has grown by 8.19% in the past year. This is quite good.
Measured over the past years, PYPL shows a quite strong growth in Revenue. The Revenue has been growing by 14.02% on average per year.
The Earnings Per Share is expected to grow by 15.88% on average over the next years. This is quite good.
PYPL is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.38% yearly.

Deciphering NASDAQ:PYPL's Valuation Rating

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:PYPL has earned a 7 for valuation:

A Price/Earnings ratio of 11.76 indicates a reasonable valuation of PYPL.
Compared to the rest of the industry, the Price/Earnings ratio of PYPL indicates a somewhat cheap valuation: PYPL is cheaper than 69.90% of the companies listed in the same industry.
PYPL's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.01.
PYPL is valuated reasonably with a Price/Forward Earnings ratio of 10.73.
Based on the Price/Forward Earnings ratio, PYPL is valued a bit cheaper than 66.99% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.61, PYPL is valued rather cheaply.
PYPL's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. PYPL is cheaper than 81.55% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PYPL indicates a somewhat cheap valuation: PYPL is cheaper than 68.93% of the companies listed in the same industry.
The excellent profitability rating of PYPL may justify a higher PE ratio.

Health Analysis for NASDAQ:PYPL

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:PYPL, the assigned 6 reflects its health status:

PYPL has a better Altman-Z score (1.80) than 70.87% of its industry peers.
PYPL has a debt to FCF ratio of 2.59. This is a good value and a sign of high solvency as PYPL would need 2.59 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.59, PYPL is in the better half of the industry, outperforming 72.82% of the companies in the same industry.
A Debt/Equity ratio of 0.46 indicates that PYPL is not too dependend on debt financing.
With a decent Quick ratio value of 1.29, PYPL is doing good in the industry, outperforming 60.19% of the companies in the same industry.

Profitability Analysis for NASDAQ:PYPL

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:PYPL has achieved a 8:

PYPL's Return On Assets of 5.17% is amongst the best of the industry. PYPL outperforms 81.55% of its industry peers.
PYPL's Return On Equity of 20.17% is amongst the best of the industry. PYPL outperforms 83.50% of its industry peers.
PYPL has a better Return On Invested Capital (11.03%) than 87.38% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PYPL is above the industry average of 7.30%.
The 3 year average ROIC (10.00%) for PYPL is below the current ROIC(11.03%), indicating increased profibility in the last year.
PYPL has a Profit Margin of 14.26%. This is in the better half of the industry: PYPL outperforms 66.99% of its industry peers.
PYPL has a Operating Margin of 16.61%. This is in the better half of the industry: PYPL outperforms 60.19% of its industry peers.
With a decent Gross Margin value of 39.59%, PYPL is doing good in the industry, outperforming 64.08% of the companies in the same industry.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Our latest full fundamental report of PYPL contains the most current fundamental analsysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.