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Investors seeking growth at a reasonable cost should explore NASDAQ:PYPL.

By Mill Chart

Last update: Apr 17, 2024

Here's PAYPAL HOLDINGS INC (NASDAQ:PYPL) for you, a growth stock our stock screener believes is undervalued. NASDAQ:PYPL is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

ChartMill's Evaluation of Growth

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:PYPL, the assigned 7 reflects its growth potential:

  • 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.
  • PYPL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.12% yearly.
  • 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.
  • The Earnings Per Share is expected to grow by 15.88% on average over the next years. This is quite good.
  • 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.

Deciphering NASDAQ:PYPL's Valuation Rating

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:PYPL has received a 5 out of 10:

  • Based on the Price/Earnings ratio, PYPL is valued a bit cheaper than 66.67% of the companies in the same industry.
  • PYPL's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.93.
  • PYPL's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.41.
  • PYPL's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PYPL is cheaper than 75.49% of the companies in the same industry.
  • PYPL's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PYPL is cheaper than 64.71% of the companies in the same industry.
  • PYPL has a very decent profitability rating, which may justify a higher PE ratio.

Unpacking NASDAQ:PYPL's Health Rating

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:PYPL has achieved a 6 out of 10:

  • PYPL has a Altman-Z score of 1.83. This is in the better half of the industry: PYPL outperforms 73.53% of its industry peers.
  • PYPL has a debt to FCF ratio of 2.59. This is a good value and a sign of high solvency as PYPL would need 2.59 years to pay back of all of its debts.
  • The Debt to FCF ratio of PYPL (2.59) is better than 74.51% of its industry peers.
  • A Debt/Equity ratio of 0.46 indicates that PYPL is not too dependend on debt financing.
  • With a decent Quick ratio value of 1.29, PYPL is doing good in the industry, outperforming 61.76% of the companies in the same industry.

Assessing Profitability for NASDAQ:PYPL

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:PYPL has achieved a 7:

  • The Return On Assets of PYPL (5.17%) is better than 81.37% of its industry peers.
  • PYPL has a better Return On Equity (20.17%) than 85.29% of its industry peers.
  • PYPL has a better Return On Invested Capital (11.03%) than 86.27% of its industry peers.
  • PYPL had an Average Return On Invested Capital over the past 3 years of 10.00%. This is above the industry average of 7.90%.
  • The last Return On Invested Capital (11.03%) for PYPL is above the 3 year average (10.00%), which is a sign of increasing profitability.
  • The Profit Margin of PYPL (14.26%) is better than 66.67% of its industry peers.
  • PYPL has a Gross Margin of 39.59%. This is in the better half of the industry: PYPL outperforms 60.78% 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.

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PAYPAL HOLDINGS INC

NASDAQ:PYPL (5/24/2024, 7:00:00 PM)

After market: 61.67 +0.03 (+0.05%)

61.64

+0.06 (+0.1%)

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