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 100 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 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.
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
PYPL's Return On Assets of 5.59% is fine compared to the rest of the industry. PYPL outperforms 78.00% of its industry peers.
With an excellent Return On Equity value of 22.44%, PYPL belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
With an excellent Return On Invested Capital value of 13.48%, PYPL belongs to the best of the industry, outperforming 88.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for PYPL is in line with the industry average of 11.84%.
The 3 year average ROIC (11.47%) for PYPL is below the current ROIC(13.48%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.59% | ||
| ROE | 22.44% | ||
| ROIC | 13.48% |
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 14.26%, PYPL is doing good in the industry, outperforming 62.00% of the companies in the same industry.
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 (18.75%) than 65.00% of its industry peers.
PYPL's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 41.40%, PYPL is in the better half of the industry, outperforming 61.00% 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 | 18.75% | ||
| PM (TTM) | 14.26% | ||
| GM | 41.4% |
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.
Compared to 1 year ago, PYPL has a worse debt to assets ratio.
2.2 Solvency
PYPL has an Altman-Z score of 2.07. 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.
PYPL has a Altman-Z score of 2.07. This is in the better half of the industry: PYPL outperforms 74.00% of its industry peers.
The Debt to FCF ratio of PYPL is 2.12, which is a good value as it means it would take PYPL, 2.12 years of fcf income to pay off all of its debts.
PYPL has a Debt to FCF ratio of 2.12. This is in the better half of the industry: PYPL outperforms 77.00% 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.
Looking at the Debt to Equity ratio, with a value of 0.56, PYPL is in line with its industry, outperforming 57.00% of the companies in the same industry.
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 | 2.12 | ||
| Altman-Z | 2.07 |
ROIC/WACC1.65
WACC8.17%
2.3 Liquidity
A Current Ratio of 1.30 indicates that PYPL should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.30, PYPL is in line with its industry, outperforming 60.00% of the companies in the same industry.
PYPL has a Quick Ratio of 1.30. This is a normal value and indicates that PYPL is financially healthy and should not expect problems in meeting its short term obligations.
PYPL's Quick ratio of 1.30 is fine compared to the rest of the industry. PYPL outperforms 62.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.3 |
3. Growth
3.1 Past
The earnings per share for PYPL have decreased by -8.05% in the last year.
The Earnings Per Share has been growing by 9.87% on average over the past years. This is quite good.
PYPL shows a small growth in Revenue. In the last year, the Revenue has grown by 4.79%.
The Revenue has been growing by 12.34% on average over the past years. This is quite good.
EPS 1Y (TTM)-8.05%
EPS 3Y2.76%
EPS 5Y9.87%
EPS Q2Q%-5%
Revenue 1Y (TTM)4.79%
Revenue growth 3Y7.82%
Revenue growth 5Y12.34%
Sales Q2Q%1.19%
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.
Based on estimates for the next years, PYPL will show a small growth in Revenue. The Revenue will grow by 5.57% on average per year.
EPS Next Y4.45%
EPS Next 2Y7.59%
EPS Next 3Y9.57%
EPS Next 5Y11.09%
Revenue Next Year3.06%
Revenue Next 2Y4.39%
Revenue Next 3Y5.34%
Revenue Next 5Y5.57%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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 15.60, the valuation of PYPL can be described as correct.
PYPL's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.45, PYPL is valued a bit cheaper.
The Price/Forward Earnings ratio is 13.29, which indicates a correct valuation of PYPL.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PYPL is on the same level as its industry peers.
PYPL's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.6 | ||
| Fwd PE | 13.29 |
4.2 Price Multiples
65.00% 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 71.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.48 | ||
| EV/EBITDA | 10.32 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PYPL does not grow enough to justify the current Price/Earnings ratio.
PYPL has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.51
PEG (5Y)1.58
EPS Next 2Y7.59%
EPS Next 3Y9.57%
5. Dividend
5.1 Amount
No dividends for PYPL!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
76.59
+0.28 (+0.37%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners79.32%
Inst Owner Change2.29%
Ins Owners0.09%
Ins Owner Change0.29%
Market Cap74.49B
Analysts72.94
Price Target83.25 (8.7%)
Short Float %2.84%
Short Ratio2.86
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)8.11%
Min EPS beat(2)3.97%
Max EPS beat(2)12.26%
EPS beat(4)4
Avg EPS beat(4)11.13%
Min EPS beat(4)3.97%
Max EPS beat(4)18.26%
EPS beat(8)7
Avg EPS beat(8)8.17%
EPS beat(12)11
Avg EPS beat(12)7.31%
EPS beat(16)13
Avg EPS beat(16)5.31%
Revenue beat(2)0
Avg Revenue beat(2)-1.66%
Min Revenue beat(2)-2.67%
Max Revenue beat(2)-0.65%
Revenue beat(4)0
Avg Revenue beat(4)-1.73%
Min Revenue beat(4)-2.67%
Max Revenue beat(4)-0.65%
Revenue beat(8)1
Avg Revenue beat(8)-1.22%
Revenue beat(12)1
Avg Revenue beat(12)-1.34%
Revenue beat(16)1
Avg Revenue beat(16)-1.45%
PT rev (1m)-0.67%
PT rev (3m)-13.49%
EPS NQ rev (1m)0.68%
EPS NQ rev (3m)6.35%
EPS NY rev (1m)0.11%
EPS NY rev (3m)1.13%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-0.36%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)-1.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.6 | ||
| Fwd PE | 13.29 | ||
| P/S | 2.34 | ||
| P/FCF | 12.48 | ||
| P/OCF | 11.13 | ||
| P/B | 3.68 | ||
| P/tB | 8.23 | ||
| EV/EBITDA | 10.32 |
EPS(TTM)4.91
EY6.41%
EPS(NY)5.76
Fwd EY7.53%
FCF(TTM)6.14
FCFY8.01%
OCF(TTM)6.88
OCFY8.99%
SpS32.79
BVpS20.83
TBVpS9.3
PEG (NY)3.51
PEG (5Y)1.58
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.59% | ||
| ROE | 22.44% | ||
| ROCE | 17.25% | ||
| ROIC | 13.48% | ||
| ROICexc | 19.93% | ||
| ROICexgc | 38.19% | ||
| OM | 18.75% | ||
| PM (TTM) | 14.26% | ||
| GM | 41.4% | ||
| FCFM | 18.71% |
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 Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 2.12 | ||
| Debt/EBITDA | 1.64 | ||
| Cap/Depr | 71.64% | ||
| Cap/Sales | 2.27% | ||
| Interest Coverage | 16.34 | ||
| Cash Conversion | 95.74% | ||
| Profit Quality | 131.28% | ||
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.3 | ||
| Altman-Z | 2.07 |
F-Score8
WACC8.17%
ROIC/WACC1.65
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)-8.05%
EPS 3Y2.76%
EPS 5Y9.87%
EPS Q2Q%-5%
EPS Next Y4.45%
EPS Next 2Y7.59%
EPS Next 3Y9.57%
EPS Next 5Y11.09%
Revenue 1Y (TTM)4.79%
Revenue growth 3Y7.82%
Revenue growth 5Y12.34%
Sales Q2Q%1.19%
Revenue Next Year3.06%
Revenue Next 2Y4.39%
Revenue Next 3Y5.34%
Revenue Next 5Y5.57%
EBIT growth 1Y15.85%
EBIT growth 3Y10.05%
EBIT growth 5Y15.61%
EBIT Next Year23.59%
EBIT Next 3Y12.87%
EBIT Next 5Y10.05%
FCF growth 1Y17.46%
FCF growth 3Y11.44%
FCF growth 5Y14.98%
OCF growth 1Y16.08%
OCF growth 3Y8.72%
OCF growth 5Y12.85%