PAYPAL HOLDINGS INC (PYPL) Stock Fundamental Analysis
NASDAQ:PYPL - Nasdaq - US70450Y1038 - Common Stock - Currency: USD
Overall PYPL gets a fundamental rating of 5 out of 10. We evaluated PYPL against 101 industry peers in the Financial Services industry. PYPL has an excellent profitability rating, but there are some minor concerns on its financial health. PYPL is not valued too expensively and it also shows a decent growth rate.
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.
In the past 5 years PYPL has always been profitable.
Each year in the past 5 years PYPL had a positive operating cash flow.
1.2 Ratios
The Return On Assets of PYPL (5.08%) is better than 79.21% of its industry peers.
PYPL's Return On Equity of 20.31% is amongst the best of the industry. PYPL outperforms 85.15% of its industry peers.
The Return On Invested Capital of PYPL (13.55%) is better than 90.10% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PYPL is above the industry average of 7.75%.
The 3 year average ROIC (11.47%) for PYPL is below the current ROIC(13.55%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.08% | ||
| ROE | 20.31% | ||
| ROIC | 13.55% |
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 13.04%. This is comparable to the rest of the industry: PYPL outperforms 57.43% of its industry peers.
In the last couple of years the Profit Margin of PYPL has remained more or less at the same level.
PYPL has a better Operating Margin (18.12%) than 63.37% of its industry peers.
In the last couple of years the Operating Margin of PYPL has grown nicely.
PYPL's Gross Margin of 40.54% is fine compared to the rest of the industry. PYPL outperforms 61.39% of its industry peers.
In the last couple of years the Gross Margin of PYPL has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.12% | ||
| PM (TTM) | 13.04% | ||
| GM | 40.54% |
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 below the Cost of Capital (WACC), so PYPL is destroying value.
The number of shares outstanding for PYPL has been reduced compared to 1 year ago.
PYPL has less shares outstanding than it did 5 years ago.
PYPL has a worse debt/assets ratio than last year.
2.2 Solvency
PYPL has an Altman-Z score of 2.03. 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 2.03, PYPL is in the better half of the industry, outperforming 72.28% of the companies in the same industry.
PYPL has a debt to FCF ratio of 1.64. This is a very positive value and a sign of high solvency as it would only need 1.64 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.64, PYPL is in the better half of the industry, outperforming 74.26% of the companies in the same industry.
PYPL has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.
PYPL has a Debt to Equity ratio (0.48) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 1.64 | ||
| Altman-Z | 2.03 |
ROIC/WACC0.94
WACC14.43%
2.3 Liquidity
PYPL has a Current Ratio of 1.26. 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 1.26, PYPL is in the better half of the industry, outperforming 61.39% of the companies in the same industry.
A Quick Ratio of 1.26 indicates that PYPL should not have too much problems paying its short term obligations.
PYPL's Quick ratio of 1.26 is fine compared to the rest of the industry. PYPL outperforms 62.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.26 |
3. Growth
3.1 Past
PYPL shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.54%.
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 6.81% in the past year.
Measured over the past years, PYPL shows a quite strong growth in Revenue. The Revenue has been growing by 12.34% on average per year.
EPS 1Y (TTM)-2.54%
EPS 3Y2.76%
EPS 5Y9.87%
EPS Q2Q%-19.59%
Revenue 1Y (TTM)6.81%
Revenue growth 3Y7.82%
Revenue growth 5Y12.34%
Sales Q2Q%4.24%
3.2 Future
The Earnings Per Share is expected to grow by 11.30% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.43% on average over the next years.
EPS Next Y3.24%
EPS Next 2Y7.48%
EPS Next 3Y9.06%
EPS Next 5Y11.3%
Revenue Next Year4.82%
Revenue Next 2Y5.58%
Revenue Next 3Y6.02%
Revenue Next 5Y7.43%
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
A Price/Earnings ratio of 15.59 indicates a correct valuation of PYPL.
PYPL's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 30.30. PYPL is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 15.10 indicates a correct valuation of PYPL.
PYPL's Price/Forward Earnings ratio is in line with the industry average.
PYPL is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.06, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.59 | ||
| Fwd PE | 15.1 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PYPL is valued a bit cheaper than the industry average as 71.29% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, PYPL is valued a bit cheaper than 77.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.35 | ||
| EV/EBITDA | 10.71 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PYPL has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.81
PEG (5Y)1.58
EPS Next 2Y7.48%
EPS Next 3Y9.06%
5. Dividend
5.1 Amount
PYPL does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
77.63
-0.73 (-0.93%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners74.06%
Inst Owner Change-0.71%
Ins Owners0.07%
Ins Owner Change0.24%
Market Cap76.79B
Analysts74.12
Price Target97.08 (25.05%)
Short Float %2.52%
Short Ratio2.43
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)6.99%
Min EPS beat(2)3.97%
Max EPS beat(2)10.02%
EPS beat(4)4
Avg EPS beat(4)11.27%
Min EPS beat(4)3.97%
Max EPS beat(4)18.26%
EPS beat(8)7
Avg EPS beat(8)7.19%
EPS beat(12)10
Avg EPS beat(12)6.15%
EPS beat(16)13
Avg EPS beat(16)5.67%
Revenue beat(2)0
Avg Revenue beat(2)-1.56%
Min Revenue beat(2)-2.46%
Max Revenue beat(2)-0.65%
Revenue beat(4)1
Avg Revenue beat(4)-0.94%
Min Revenue beat(4)-2.46%
Max Revenue beat(4)0.47%
Revenue beat(8)1
Avg Revenue beat(8)-1.02%
Revenue beat(12)1
Avg Revenue beat(12)-1.17%
Revenue beat(16)2
Avg Revenue beat(16)-1.27%
PT rev (1m)1.78%
PT rev (3m)13.94%
EPS NQ rev (1m)3.41%
EPS NQ rev (3m)3.85%
EPS NY rev (1m)3.15%
EPS NY rev (3m)3.44%
Revenue NQ rev (1m)-2.33%
Revenue NQ rev (3m)-5.09%
Revenue NY rev (1m)-0.82%
Revenue NY rev (3m)-0.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.59 | ||
| Fwd PE | 15.1 | ||
| P/S | 2.42 | ||
| P/FCF | 11.35 | ||
| P/OCF | 10.31 | ||
| P/B | 3.76 | ||
| P/tB | 8.3 | ||
| EV/EBITDA | 10.71 |
EPS(TTM)4.98
EY6.42%
EPS(NY)5.14
Fwd EY6.62%
FCF(TTM)6.84
FCFY8.81%
OCF(TTM)7.53
OCFY9.7%
SpS32.14
BVpS20.64
TBVpS9.35
PEG (NY)4.81
PEG (5Y)1.58
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.08% | ||
| ROE | 20.31% | ||
| ROCE | 17.34% | ||
| ROIC | 13.55% | ||
| ROICexc | 20.09% | ||
| ROICexgc | 40.03% | ||
| OM | 18.12% | ||
| PM (TTM) | 13.04% | ||
| GM | 40.54% | ||
| FCFM | 21.28% |
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-Score6
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 1.64 | ||
| Debt/EBITDA | 1.46 | ||
| Cap/Depr | 66.18% | ||
| Cap/Sales | 2.15% | ||
| Interest Coverage | 15.75 | ||
| Cash Conversion | 109.64% | ||
| Profit Quality | 163.18% | ||
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.26 | ||
| Altman-Z | 2.03 |
F-Score6
WACC14.43%
ROIC/WACC0.94
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)-2.54%
EPS 3Y2.76%
EPS 5Y9.87%
EPS Q2Q%-19.59%
EPS Next Y3.24%
EPS Next 2Y7.48%
EPS Next 3Y9.06%
EPS Next 5Y11.3%
Revenue 1Y (TTM)6.81%
Revenue growth 3Y7.82%
Revenue growth 5Y12.34%
Sales Q2Q%4.24%
Revenue Next Year4.82%
Revenue Next 2Y5.58%
Revenue Next 3Y6.02%
Revenue Next 5Y7.43%
EBIT growth 1Y16.57%
EBIT growth 3Y10.05%
EBIT growth 5Y15.61%
EBIT Next Year22.75%
EBIT Next 3Y9.33%
EBIT Next 5Y11.26%
FCF growth 1Y60.36%
FCF growth 3Y11.44%
FCF growth 5Y14.98%
OCF growth 1Y53.83%
OCF growth 3Y8.72%
OCF growth 5Y12.85%