Looking for growth without the hefty price tag? Consider NASDAQ:PYPL.

Last update: Mar 5, 2024

Consider PAYPAL HOLDINGS INC (NASDAQ:PYPL) as an affordable growth stock, identified by our stock screening tool. NASDAQ:PYPL is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

Unpacking NASDAQ:PYPL's Growth Rating

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:PYPL boasts a 7 out of 10:

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.
The Earnings Per Share has been growing by 16.12% on average over the past years. This is quite good.
Looking at the last year, PYPL shows a quite strong growth in Revenue. The Revenue has grown by 8.19% in the last year.
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.
PYPL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.88% yearly.
Based on estimates for the next years, PYPL will show a quite strong growth in Revenue. The Revenue will grow by 11.06% on average per year.

Understanding NASDAQ:PYPL's Valuation

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:PYPL, the assigned 7 reflects its valuation:

A Price/Earnings ratio of 11.74 indicates a reasonable valuation of PYPL.
Based on the Price/Earnings ratio, PYPL is valued a bit cheaper than the industry average as 74.76% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 25.93, PYPL is valued rather cheaply.
With a Price/Forward Earnings ratio of 10.71, the valuation of PYPL can be described as very reasonable.
Based on the Price/Forward Earnings ratio, PYPL is valued a bit cheaper than 68.93% of the companies in the same industry.
PYPL's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.91.
PYPL's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. PYPL is cheaper than 80.58% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PYPL is valued a bit cheaper than 66.02% of the companies in the same industry.
PYPL has a very decent profitability rating, which may justify a higher PE ratio.

Health Analysis for NASDAQ:PYPL

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 6 out of 10:

PYPL has a Altman-Z score of 1.79. This is in the better half of the industry: PYPL outperforms 73.79% of its industry peers.
The Debt to FCF ratio of PYPL is 2.59, which is a good value as it means it would take PYPL, 2.59 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of PYPL (2.59) is better than 73.79% of its industry peers.
PYPL has a Debt/Equity ratio of 0.46. This is a healthy value indicating a solid balance between debt and equity.
The Quick ratio of PYPL (1.29) is better than 61.16% of its industry peers.

What does the Profitability looks like for NASDAQ:PYPL

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:PYPL was assigned a score of 7 for profitability:

PYPL's Return On Assets of 5.17% is amongst the best of the industry. PYPL outperforms 83.50% of its industry peers.
PYPL's Return On Equity of 20.17% is amongst the best of the industry. PYPL outperforms 86.41% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.03%, PYPL belongs to the top of the industry, outperforming 86.41% of the companies in the same industry.
PYPL had an Average Return On Invested Capital over the past 3 years of 10.00%. This is above the industry average of 7.94%.
The 3 year average ROIC (10.00%) for PYPL is below the current ROIC(11.03%), indicating increased profibility in the last year.
The Profit Margin of PYPL (14.26%) is better than 66.99% of its industry peers.
PYPL has a Gross Margin of 39.59%. This is in the better half of the industry: PYPL outperforms 64.08% of its industry peers.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

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

Disclaimer

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.