PAYPAL HOLDINGS INC (PYPL) Stock Fundamental Analysis
USA - NASDAQ:PYPL - US70450Y1038 - Common Stock
66.85 USD
-0.26 (-0.39%)
66.88 USD
+0.03 (+0.04%)
We assign a fundamental rating of 5 out of 10 to PYPL. PYPL was compared to 101 industry peers in the Financial Services industry. While PYPL has a great profitability rating, there are some minor concerns on its financial health. PYPL has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year PYPL was profitable.
In the past year PYPL had a positive cash flow from operations.
Each year in the past 5 years PYPL has been profitable.
Each year in the past 5 years PYPL had a positive operating cash flow.
1.2 Ratios
PYPL has a better Return On Assets (5.87%) than 79.21% of its industry peers.
Looking at the Return On Equity, with a value of 23.16%, PYPL belongs to the top of the industry, outperforming 87.13% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 13.86%, PYPL belongs to the top of the industry, outperforming 90.10% of the companies in the same industry.
PYPL had an Average Return On Invested Capital over the past 3 years of 11.47%. This is above the industry average of 7.64%.
The last Return On Invested Capital (13.86%) for PYPL is above the 3 year average (11.47%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.87% | ||
| ROE | 23.16% | ||
| ROIC | 13.86% |
ROA(3y)4.44%
ROA(5y)4.96%
ROE(3y)17.47%
ROE(5y)18.52%
ROIC(3y)11.47%
ROIC(5y)10.62%
1.3 Margins
With a decent Profit Margin value of 14.49%, PYPL is doing good in the industry, outperforming 62.38% of the companies in the same industry.
PYPL's Profit Margin has been stable in the last couple of years.
With a decent Operating Margin value of 19.08%, PYPL is doing good in the industry, outperforming 66.34% of the companies in the same industry.
PYPL's Operating Margin has improved in the last couple of years.
PYPL has a Gross Margin (41.68%) which is comparable to the rest of the industry.
PYPL's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.08% | ||
| PM (TTM) | 14.49% | ||
| GM | 41.68% |
OM growth 3Y2.07%
OM growth 5Y2.92%
PM growth 3Y-7.41%
PM growth 5Y-1.18%
GM growth 3Y-4.8%
GM growth 5Y-2.04%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so PYPL is still creating some value.
Compared to 1 year ago, PYPL has less shares outstanding
PYPL has less shares outstanding than it did 5 years ago.
The debt/assets ratio for PYPL is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.05 indicates that PYPL is not a great score, but indicates only limited risk for bankruptcy at the moment.
PYPL has a better Altman-Z score (2.05) than 78.22% of its industry peers.
PYPL has a debt to FCF ratio of 2.13. This is a good value and a sign of high solvency as PYPL would need 2.13 years to pay back of all of its debts.
PYPL has a better Debt to FCF ratio (2.13) than 76.24% of its industry peers.
PYPL has a Debt/Equity ratio of 0.56. This is a neutral value indicating PYPL is somewhat dependend on debt financing.
The Debt to Equity ratio of PYPL (0.56) is comparable to the rest of the industry.
Even though the debt/equity ratio score it not favorable for PYPL, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 2.13 | ||
| Altman-Z | 2.05 |
ROIC/WACC1.78
WACC7.79%
2.3 Liquidity
PYPL has a Current Ratio of 1.33. This is a normal value and indicates that PYPL is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.33, PYPL is doing good in the industry, outperforming 60.40% of the companies in the same industry.
PYPL has a Quick Ratio of 1.33. This is a normal value and indicates that PYPL is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.33, PYPL is doing good in the industry, outperforming 62.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
PYPL shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.66%.
Measured over the past years, PYPL shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.87% on average per year.
The Revenue has been growing slightly by 4.07% in the past year.
The Revenue has been growing by 12.34% on average over the past years. This is quite good.
EPS 1Y (TTM)-4.66%
EPS 3Y2.76%
EPS 5Y9.87%
EPS Q2Q%17.65%
Revenue 1Y (TTM)4.07%
Revenue growth 3Y7.82%
Revenue growth 5Y12.34%
Sales Q2Q%5.11%
3.2 Future
PYPL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.09% yearly.
PYPL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.57% yearly.
EPS Next Y7.44%
EPS Next 2Y9.04%
EPS Next 3Y10.45%
EPS Next 5Y11.09%
Revenue Next Year4.43%
Revenue Next 2Y5.21%
Revenue Next 3Y5.81%
Revenue Next 5Y5.57%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 13.06, which indicates a correct valuation of PYPL.
Compared to the rest of the industry, the Price/Earnings ratio of PYPL is on the same level as its industry peers.
When comparing the Price/Earnings ratio of PYPL to the average of the S&P500 Index (27.20), we can say PYPL is valued rather cheaply.
A Price/Forward Earnings ratio of 11.29 indicates a reasonable valuation of PYPL.
PYPL's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of PYPL to the average of the S&P500 Index (22.71), we can say PYPL is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.06 | ||
| Fwd PE | 11.29 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PYPL indicates a somewhat cheap valuation: PYPL is cheaper than 79.21% of the companies listed in the same industry.
PYPL's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PYPL is cheaper than 71.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.07 | ||
| EV/EBITDA | 8.68 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of PYPL may justify a higher PE ratio.
PEG (NY)1.76
PEG (5Y)1.32
EPS Next 2Y9.04%
EPS Next 3Y10.45%
5. Dividend
5.1 Amount
No dividends for PYPL!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
66.85
-0.26 (-0.39%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners80.95%
Inst Owner Change-1.15%
Ins Owners0.1%
Ins Owner Change0.19%
Market Cap63.87B
Analysts72.65
Price Target84.01 (25.67%)
Short Float %3.25%
Short Ratio2.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.05%
Min EPS beat(2)5.83%
Max EPS beat(2)12.26%
EPS beat(4)4
Avg EPS beat(4)8.02%
Min EPS beat(4)3.97%
Max EPS beat(4)12.26%
EPS beat(8)8
Avg EPS beat(8)9.18%
EPS beat(12)11
Avg EPS beat(12)7.29%
EPS beat(16)13
Avg EPS beat(16)5.65%
Revenue beat(2)1
Avg Revenue beat(2)-1.06%
Min Revenue beat(2)-2.67%
Max Revenue beat(2)0.55%
Revenue beat(4)1
Avg Revenue beat(4)-1.31%
Min Revenue beat(4)-2.67%
Max Revenue beat(4)0.55%
Revenue beat(8)2
Avg Revenue beat(8)-0.93%
Revenue beat(12)2
Avg Revenue beat(12)-1.16%
Revenue beat(16)2
Avg Revenue beat(16)-1.26%
PT rev (1m)-0.4%
PT rev (3m)0.85%
EPS NQ rev (1m)0.09%
EPS NQ rev (3m)-5.38%
EPS NY rev (1m)3.02%
EPS NY rev (3m)2.97%
Revenue NQ rev (1m)0.11%
Revenue NQ rev (3m)0.14%
Revenue NY rev (1m)1.27%
Revenue NY rev (3m)1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.06 | ||
| Fwd PE | 11.29 | ||
| P/S | 1.98 | ||
| P/FCF | 12.07 | ||
| P/OCF | 10.53 | ||
| P/B | 3.16 | ||
| P/tB | 7.13 | ||
| EV/EBITDA | 8.68 |
EPS(TTM)5.12
EY7.66%
EPS(NY)5.92
Fwd EY8.86%
FCF(TTM)5.54
FCFY8.29%
OCF(TTM)6.35
OCFY9.5%
SpS33.8
BVpS21.14
TBVpS9.37
PEG (NY)1.76
PEG (5Y)1.32
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.87% | ||
| ROE | 23.16% | ||
| ROCE | 17.74% | ||
| ROIC | 13.86% | ||
| ROICexc | 19.48% | ||
| ROICexgc | 35.74% | ||
| OM | 19.08% | ||
| PM (TTM) | 14.49% | ||
| GM | 41.68% | ||
| FCFM | 16.39% |
ROA(3y)4.44%
ROA(5y)4.96%
ROE(3y)17.47%
ROE(5y)18.52%
ROIC(3y)11.47%
ROIC(5y)10.62%
ROICexc(3y)17.88%
ROICexc(5y)16.45%
ROICexgc(3y)39.06%
ROICexgc(5y)35.94%
ROCE(3y)14.68%
ROCE(5y)13.59%
ROICexcg growth 3Y7.88%
ROICexcg growth 5Y4.11%
ROICexc growth 3Y11.61%
ROICexc growth 5Y4.7%
OM growth 3Y2.07%
OM growth 5Y2.92%
PM growth 3Y-7.41%
PM growth 5Y-1.18%
GM growth 3Y-4.8%
GM growth 5Y-2.04%
F-Score8
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 2.13 | ||
| Debt/EBITDA | 1.58 | ||
| Cap/Depr | 78.34% | ||
| Cap/Sales | 2.4% | ||
| Interest Coverage | 15.76 | ||
| Cash Conversion | 84.85% | ||
| Profit Quality | 113.1% | ||
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z | 2.05 |
F-Score8
WACC7.79%
ROIC/WACC1.78
Cap/Depr(3y)59.3%
Cap/Depr(5y)64.5%
Cap/Sales(3y)2.27%
Cap/Sales(5y)2.88%
Profit Quality(3y)157.9%
Profit Quality(5y)143.67%
High Growth Momentum
Growth
EPS 1Y (TTM)-4.66%
EPS 3Y2.76%
EPS 5Y9.87%
EPS Q2Q%17.65%
EPS Next Y7.44%
EPS Next 2Y9.04%
EPS Next 3Y10.45%
EPS Next 5Y11.09%
Revenue 1Y (TTM)4.07%
Revenue growth 3Y7.82%
Revenue growth 5Y12.34%
Sales Q2Q%5.11%
Revenue Next Year4.43%
Revenue Next 2Y5.21%
Revenue Next 3Y5.81%
Revenue Next 5Y5.57%
EBIT growth 1Y13.21%
EBIT growth 3Y10.05%
EBIT growth 5Y15.61%
EBIT Next Year23.08%
EBIT Next 3Y12.19%
EBIT Next 5Y10.05%
FCF growth 1Y44.75%
FCF growth 3Y11.44%
FCF growth 5Y14.98%
OCF growth 1Y40.55%
OCF growth 3Y8.72%
OCF growth 5Y12.85%