PAYPAL HOLDINGS INC (PYPL) Stock Fundamental Analysis
USA - NASDAQ:PYPL - US70450Y1038 - Common Stock
60.57 USD
+2.47 (+4.24%)
60.92 USD
+0.35 (+0.58%)
We assign a fundamental rating of 6 out of 10 to PYPL. PYPL was compared to 99 industry peers in the Financial Services industry. While PYPL belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. PYPL has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
PYPL had positive earnings in the past year.
PYPL had a positive operating cash flow in the past year.
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 Return On Assets of 6.16%. This is in the better half of the industry: PYPL outperforms 79.80% of its industry peers.
The Return On Equity of PYPL (24.34%) is better than 87.88% of its industry peers.
PYPL has a Return On Invested Capital of 14.11%. This is amongst the best in the industry. PYPL outperforms 90.91% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PYPL is above the industry average of 8.14%.
The last Return On Invested Capital (14.11%) for PYPL is above the 3 year average (11.47%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.16% | ||
| ROE | 24.34% | ||
| ROIC | 14.11% |
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
PYPL has a Profit Margin of 14.96%. This is in the better half of the industry: PYPL outperforms 62.63% of its industry peers.
PYPL's Profit Margin has been stable in the last couple of years.
PYPL's Operating Margin of 19.16% is fine compared to the rest of the industry. PYPL outperforms 67.68% of its industry peers.
In the last couple of years the Operating Margin of PYPL has grown nicely.
PYPL has a better Gross Margin (41.56%) than 62.63% of its industry peers.
PYPL's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.16% | ||
| PM (TTM) | 14.96% | ||
| GM | 41.56% |
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 well above the Cost of Capital (WACC), so PYPL is creating value.
The number of shares outstanding for PYPL has been reduced compared to 1 year ago.
Compared to 5 years ago, PYPL has less shares outstanding
PYPL has a worse debt/assets ratio than last year.
2.2 Solvency
PYPL has an Altman-Z score of 2.01. This is not the best score and indicates that PYPL is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of PYPL (2.01) is better than 76.77% of its industry peers.
PYPL has a debt to FCF ratio of 2.06. This is a good value and a sign of high solvency as PYPL would need 2.06 years to pay back of all of its debts.
PYPL has a better Debt to FCF ratio (2.06) than 74.75% of its industry peers.
A Debt/Equity ratio of 0.56 indicates that PYPL is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.56, PYPL perfoms like the industry average, outperforming 56.57% of the companies in the same 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 | 2.06 | ||
| Altman-Z | 2.01 |
ROIC/WACC1.82
WACC7.76%
2.3 Liquidity
A Current Ratio of 1.34 indicates that PYPL should not have too much problems paying its short term obligations.
PYPL's Current ratio of 1.34 is fine compared to the rest of the industry. PYPL outperforms 64.65% of its industry peers.
PYPL has a Quick Ratio of 1.34. This is a normal value and indicates that PYPL is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of PYPL (1.34) is better than 65.66% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
PYPL shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.19%.
The Earnings Per Share has been growing by 9.87% on average over the past years. This is quite good.
Looking at the last year, PYPL shows a small growth in Revenue. The Revenue has grown by 4.47% in the last year.
PYPL shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.34% yearly.
EPS 1Y (TTM)-0.19%
EPS 3Y2.76%
EPS 5Y9.87%
EPS Q2Q%11.67%
Revenue 1Y (TTM)4.47%
Revenue growth 3Y7.82%
Revenue growth 5Y12.34%
Sales Q2Q%7.26%
3.2 Future
The Earnings Per Share is expected to grow by 13.14% on average over the next years. This is quite good.
Based on estimates for the next years, PYPL will show a small growth in Revenue. The Revenue will grow by 6.28% on average per year.
EPS Next Y9.42%
EPS Next 2Y9.27%
EPS Next 3Y10.66%
EPS Next 5Y13.14%
Revenue Next Year5.07%
Revenue Next 2Y5.54%
Revenue Next 3Y5.96%
Revenue Next 5Y6.28%
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 accelerating.
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
Based on the Price/Earnings ratio of 11.52, the valuation of PYPL can be described as reasonable.
PYPL's Price/Earnings ratio is in line with the industry average.
PYPL is valuated cheaply when we compare the Price/Earnings ratio to 25.45, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 10.19, the valuation of PYPL can be described as reasonable.
PYPL's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 34.46. PYPL is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.52 | ||
| Fwd PE | 10.19 |
4.2 Price Multiples
77.78% of the companies in the same industry are more expensive than PYPL, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PYPL indicates a somewhat cheap valuation: PYPL is cheaper than 69.70% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.4 | ||
| EV/EBITDA | 7.48 |
4.3 Compensation for Growth
PYPL's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PYPL has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.22
PEG (5Y)1.17
EPS Next 2Y9.27%
EPS Next 3Y10.66%
5. Dividend
5.1 Amount
PYPL has a yearly dividend return of 0.86%, which is pretty low.
Compared to an average industry Dividend Yield of 4.68, PYPL has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.45, PYPL's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
5.2 History
PYPL does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DPN/A
EPS Next 2Y9.27%
EPS Next 3Y10.66%
60.57
+2.47 (+4.24%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners80.2%
Inst Owner Change-1.7%
Ins Owners0.1%
Ins Owner Change4.63%
Market Cap57.87B
Revenue(TTM)32.86B
Net Income(TTM)4.92B
Analysts70.98
Price Target84.08 (38.81%)
Short Float %4.65%
Short Ratio2.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.61%
Min EPS beat(2)5.83%
Max EPS beat(2)9.38%
EPS beat(4)4
Avg EPS beat(4)7.86%
Min EPS beat(4)3.97%
Max EPS beat(4)12.26%
EPS beat(8)8
Avg EPS beat(8)9.88%
EPS beat(12)11
Avg EPS beat(12)7.2%
EPS beat(16)13
Avg EPS beat(16)6.14%
Revenue beat(2)2
Avg Revenue beat(2)0.4%
Min Revenue beat(2)0.26%
Max Revenue beat(2)0.55%
Revenue beat(4)2
Avg Revenue beat(4)-0.63%
Min Revenue beat(4)-2.67%
Max Revenue beat(4)0.55%
Revenue beat(8)3
Avg Revenue beat(8)-0.71%
Revenue beat(12)3
Avg Revenue beat(12)-1.01%
Revenue beat(16)3
Avg Revenue beat(16)-1.07%
PT rev (1m)-1.28%
PT rev (3m)-0.32%
EPS NQ rev (1m)-1.17%
EPS NQ rev (3m)-0.9%
EPS NY rev (1m)1.69%
EPS NY rev (3m)4.92%
Revenue NQ rev (1m)0.82%
Revenue NQ rev (3m)0.95%
Revenue NY rev (1m)0.68%
Revenue NY rev (3m)1.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.52 | ||
| Fwd PE | 10.19 | ||
| P/S | 1.76 | ||
| P/FCF | 10.4 | ||
| P/OCF | 9.01 | ||
| P/B | 2.87 | ||
| P/tB | 6.41 | ||
| EV/EBITDA | 7.48 |
EPS(TTM)5.26
EY8.68%
EPS(NY)5.95
Fwd EY9.82%
FCF(TTM)5.82
FCFY9.62%
OCF(TTM)6.73
OCFY11.1%
SpS34.4
BVpS21.14
TBVpS9.45
PEG (NY)1.22
PEG (5Y)1.17
Graham Number50.02
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.16% | ||
| ROE | 24.34% | ||
| ROCE | 18.05% | ||
| ROIC | 14.11% | ||
| ROICexc | 20.4% | ||
| ROICexgc | 37.98% | ||
| OM | 19.16% | ||
| PM (TTM) | 14.96% | ||
| GM | 41.56% | ||
| FCFM | 16.93% |
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%
ROICexgc growth 3Y7.88%
ROICexgc 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 Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 2.06 | ||
| Debt/EBITDA | 1.55 | ||
| Cap/Depr | 88.04% | ||
| Cap/Sales | 2.62% | ||
| Interest Coverage | 15.43 | ||
| Cash Conversion | 88.34% | ||
| Profit Quality | 113.18% | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.34 | ||
| Altman-Z | 2.01 |
F-Score8
WACC7.76%
ROIC/WACC1.82
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)-0.19%
EPS 3Y2.76%
EPS 5Y9.87%
EPS Q2Q%11.67%
EPS Next Y9.42%
EPS Next 2Y9.27%
EPS Next 3Y10.66%
EPS Next 5Y13.14%
Revenue 1Y (TTM)4.47%
Revenue growth 3Y7.82%
Revenue growth 5Y12.34%
Sales Q2Q%7.26%
Revenue Next Year5.07%
Revenue Next 2Y5.54%
Revenue Next 3Y5.96%
Revenue Next 5Y6.28%
EBIT growth 1Y10.67%
EBIT growth 3Y10.05%
EBIT growth 5Y15.61%
EBIT Next Year23.15%
EBIT Next 3Y12.17%
EBIT Next 5Y10.48%
FCF growth 1Y74.78%
FCF growth 3Y11.44%
FCF growth 5Y14.98%
OCF growth 1Y68.22%
OCF growth 3Y8.72%
OCF growth 5Y12.85%
PAYPAL HOLDINGS INC / PYPL FAQ
Can you provide the ChartMill fundamental rating for PAYPAL HOLDINGS INC?
ChartMill assigns a fundamental rating of 6 / 10 to PYPL.
Can you provide the valuation status for PAYPAL HOLDINGS INC?
ChartMill assigns a valuation rating of 6 / 10 to PAYPAL HOLDINGS INC (PYPL). This can be considered as Fairly Valued.
What is the profitability of PYPL stock?
PAYPAL HOLDINGS INC (PYPL) has a profitability rating of 8 / 10.
What are the PE and PB ratios of PAYPAL HOLDINGS INC (PYPL) stock?
The Price/Earnings (PE) ratio for PAYPAL HOLDINGS INC (PYPL) is 11.52 and the Price/Book (PB) ratio is 2.87.
What is the earnings growth outlook for PAYPAL HOLDINGS INC?
The Earnings per Share (EPS) of PAYPAL HOLDINGS INC (PYPL) is expected to grow by 9.42% in the next year.