PAYPAL HOLDINGS INC (PYPL) Stock Fundamental Analysis
USA - NASDAQ:PYPL - US70450Y1038 - Common Stock
62.81 USD
-2.52 (-3.86%)
62.9793 USD
+0.17 (+0.27%)
Taking everything into account, PYPL scores 6 out of 10 in our fundamental rating. PYPL was compared to 97 industry peers in the Financial Services industry. PYPL scores excellent on profitability, but 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
PYPL had positive earnings in the past year.
In the past year PYPL had a positive cash flow from operations.
Each year in the past 5 years PYPL has been profitable.
PYPL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PYPL's Return On Assets of 6.16% is fine compared to the rest of the industry. PYPL outperforms 79.38% of its industry peers.
PYPL has a better Return On Equity (24.34%) than 86.60% of its industry peers.
PYPL has a better Return On Invested Capital (14.11%) than 90.72% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PYPL is above the industry average of 8.15%.
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 62.89% of its industry peers.
In the last couple of years the Profit Margin of PYPL has remained more or less at the same level.
With a decent Operating Margin value of 19.16%, PYPL is doing good in the industry, outperforming 67.01% of the companies in the same industry.
In the last couple of years the Operating Margin of PYPL has grown nicely.
Looking at the Gross Margin, with a value of 41.56%, PYPL is in the better half of the industry, outperforming 61.86% of the companies in the same industry.
In the last couple of years the Gross Margin of PYPL has declined.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PYPL is creating value.
PYPL has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, PYPL has less shares outstanding
Compared to 1 year ago, PYPL has a worse debt to assets ratio.
2.2 Solvency
PYPL has an Altman-Z score of 2.08. 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.
Looking at the Altman-Z score, with a value of 2.08, PYPL is in the better half of the industry, outperforming 77.32% of the companies in the same industry.
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's Debt to FCF ratio of 2.06 is fine compared to the rest of the industry. PYPL outperforms 76.29% of its industry peers.
A Debt/Equity ratio of 0.56 indicates that PYPL is somewhat dependend on debt financing.
PYPL has a Debt to Equity ratio (0.56) which is in line with its industry peers.
Although PYPL does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 2.06 | ||
| Altman-Z | 2.08 |
ROIC/WACC1.81
WACC7.8%
2.3 Liquidity
PYPL has a Current 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.
Looking at the Current ratio, with a value of 1.34, PYPL is in the better half of the industry, outperforming 64.95% of the companies in the same industry.
A Quick Ratio of 1.34 indicates that PYPL should not have too much problems paying its short term obligations.
PYPL has a better Quick ratio (1.34) than 65.98% 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%.
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.
PYPL shows a small growth in Revenue. In the last year, the Revenue has grown by 4.47%.
The Revenue has been growing by 12.34% on average over the past years. This is quite good.
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
Based on estimates for the next years, PYPL will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.14% on average per year.
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 11.94, the valuation of PYPL can be described as reasonable.
PYPL's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of PYPL to the average of the S&P500 Index (25.89), we can say PYPL is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 10.56, the valuation of PYPL can be described as reasonable.
PYPL's Price/Forward Earnings ratio is in line with the industry average.
PYPL's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 34.59.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.94 | ||
| Fwd PE | 10.56 |
4.2 Price Multiples
74.23% of the companies in the same industry are more expensive than PYPL, based on the Enterprise Value to EBITDA ratio.
PYPL's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PYPL is cheaper than 70.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.78 | ||
| EV/EBITDA | 8.43 |
4.3 Compensation for Growth
The 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)1.27
PEG (5Y)1.21
EPS Next 2Y9.27%
EPS Next 3Y10.66%
5. Dividend
5.1 Amount
PYPL has a yearly dividend return of 0.85%, which is pretty low.
PYPL's Dividend Yield is comparable with the industry average which is at 4.50.
Compared to an average S&P500 Dividend Yield of 2.36, PYPL's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
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%
62.81
-2.52 (-3.86%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners80.2%
Inst Owner Change-1.11%
Ins Owners0.1%
Ins Owner Change0.16%
Market Cap60.01B
Revenue(TTM)32.86B
Net Income(TTM)4.92B
Analysts70.98
Price Target84.08 (33.86%)
Short Float %4.05%
Short Ratio3.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
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)-1.3%
EPS NQ rev (3m)-0.9%
EPS NY rev (1m)1.69%
EPS NY rev (3m)4.92%
Revenue NQ rev (1m)0.71%
Revenue NQ rev (3m)0.95%
Revenue NY rev (1m)0.68%
Revenue NY rev (3m)1.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.94 | ||
| Fwd PE | 10.56 | ||
| P/S | 1.83 | ||
| P/FCF | 10.78 | ||
| P/OCF | 9.34 | ||
| P/B | 2.97 | ||
| P/tB | 6.64 | ||
| EV/EBITDA | 8.43 |
EPS(TTM)5.26
EY8.37%
EPS(NY)5.95
Fwd EY9.47%
FCF(TTM)5.82
FCFY9.27%
OCF(TTM)6.73
OCFY10.71%
SpS34.4
BVpS21.14
TBVpS9.45
PEG (NY)1.27
PEG (5Y)1.21
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 | 2.08 |
F-Score8
WACC7.8%
ROIC/WACC1.81
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 11.94 and the Price/Book (PB) ratio is 2.97.
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.