PAYPAL HOLDINGS INC (PYPL) Stock Fundamental Analysis
USA - NASDAQ:PYPL - US70450Y1038 - Common Stock
67.11 USD
+0.22 (+0.33%)
67.2 USD
+0.09 (+0.13%)
PYPL gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 101 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
In the past year PYPL was profitable.
In the past year PYPL had a positive cash flow from operations.
PYPL had positive earnings in each of the past 5 years.
PYPL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 5.87%, PYPL is doing good in the industry, outperforming 79.21% of the companies in the same industry.
Looking at the Return On Equity, with a value of 23.16%, PYPL belongs to the top of the industry, outperforming 87.13% of the companies in the same industry.
PYPL has a Return On Invested Capital of 13.86%. This is amongst the best in the industry. PYPL outperforms 90.10% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PYPL is above the industry average of 7.64%.
The last Return On Invested Capital (13.86%) for PYPL is above the 3 year average (11.47%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.87% | ||
| ROE | 23.16% | ||
| ROIC | 13.86% |
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
The Profit Margin of PYPL (14.49%) is better than 62.38% of its industry peers.
PYPL's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 19.08%, PYPL is in the better half of the industry, outperforming 66.34% of the companies in the same industry.
PYPL's Operating Margin has improved in the last couple of years.
The Gross Margin of PYPL (41.68%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of PYPL has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.08% | ||
| PM (TTM) | 14.49% | ||
| GM | 41.68% |
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
PYPL has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, PYPL has less shares outstanding
The number of shares outstanding for PYPL has been reduced compared to 5 years ago.
PYPL has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.05 indicates that PYPL is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.05, PYPL is in the better half of the industry, outperforming 78.22% of the companies in the same industry.
The Debt to FCF ratio of PYPL is 2.13, which is a good value as it means it would take PYPL, 2.13 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.13, PYPL is in the better half of the industry, outperforming 76.24% of the companies in the same industry.
PYPL has a Debt/Equity ratio of 0.56. This is a neutral value indicating PYPL is somewhat dependend on debt financing.
The Debt to Equity ratio of PYPL (0.56) is comparable to the rest of the 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 | 2.13 | ||
| Altman-Z | 2.05 |
ROIC/WACC1.78
WACC7.81%
2.3 Liquidity
PYPL has a Current Ratio of 1.33. 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 1.33, PYPL is in the better half of the industry, outperforming 60.40% of the companies in the same industry.
A Quick Ratio of 1.33 indicates that PYPL should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.33, PYPL is in the better half of the industry, outperforming 62.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
PYPL shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.66%.
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 4.07%.
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)-4.66%
EPS 3Y2.76%
EPS 5Y9.87%
EPS Q2Q%17.65%
Revenue 1Y (TTM)4.07%
Revenue growth 3Y7.82%
Revenue growth 5Y12.34%
Sales Q2Q%5.11%
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.
The Revenue is expected to grow by 5.57% on average over the next years.
EPS Next Y7.44%
EPS Next 2Y9.04%
EPS Next 3Y10.45%
EPS Next 5Y11.09%
Revenue Next Year4.43%
Revenue Next 2Y5.21%
Revenue Next 3Y5.81%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 13.11, the valuation of PYPL can be described as correct.
PYPL's Price/Earnings ratio is in line with the industry average.
PYPL's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.27.
With a Price/Forward Earnings ratio of 11.33, the valuation of PYPL can be described as very reasonable.
PYPL's Price/Forward Earnings ratio is in line with the industry average.
PYPL is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.77, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.11 | ||
| Fwd PE | 11.33 |
4.2 Price Multiples
PYPL's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PYPL is cheaper than 79.21% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PYPL is valued a bit cheaper than 71.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.12 | ||
| EV/EBITDA | 8.65 |
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 a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.76
PEG (5Y)1.33
EPS Next 2Y9.04%
EPS Next 3Y10.45%
5. Dividend
5.1 Amount
PYPL does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
67.11
+0.22 (+0.33%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners80.95%
Inst Owner Change-1.15%
Ins Owners0.1%
Ins Owner Change0.19%
Market Cap64.12B
Analysts72.65
Price Target84.01 (25.18%)
Short Float %3.16%
Short Ratio2.8
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)9.05%
Min EPS beat(2)5.83%
Max EPS beat(2)12.26%
EPS beat(4)4
Avg EPS beat(4)8.02%
Min EPS beat(4)3.97%
Max EPS beat(4)12.26%
EPS beat(8)8
Avg EPS beat(8)9.18%
EPS beat(12)11
Avg EPS beat(12)7.29%
EPS beat(16)13
Avg EPS beat(16)5.65%
Revenue beat(2)1
Avg Revenue beat(2)-1.06%
Min Revenue beat(2)-2.67%
Max Revenue beat(2)0.55%
Revenue beat(4)1
Avg Revenue beat(4)-1.31%
Min Revenue beat(4)-2.67%
Max Revenue beat(4)0.55%
Revenue beat(8)2
Avg Revenue beat(8)-0.93%
Revenue beat(12)2
Avg Revenue beat(12)-1.16%
Revenue beat(16)2
Avg Revenue beat(16)-1.26%
PT rev (1m)-0.4%
PT rev (3m)0.85%
EPS NQ rev (1m)0.09%
EPS NQ rev (3m)-5.38%
EPS NY rev (1m)3.02%
EPS NY rev (3m)2.97%
Revenue NQ rev (1m)0.11%
Revenue NQ rev (3m)0.14%
Revenue NY rev (1m)1.27%
Revenue NY rev (3m)1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.11 | ||
| Fwd PE | 11.33 | ||
| P/S | 1.99 | ||
| P/FCF | 12.12 | ||
| P/OCF | 10.57 | ||
| P/B | 3.17 | ||
| P/tB | 7.16 | ||
| EV/EBITDA | 8.65 |
EPS(TTM)5.12
EY7.63%
EPS(NY)5.92
Fwd EY8.82%
FCF(TTM)5.54
FCFY8.25%
OCF(TTM)6.35
OCFY9.46%
SpS33.8
BVpS21.14
TBVpS9.37
PEG (NY)1.76
PEG (5Y)1.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.87% | ||
| ROE | 23.16% | ||
| ROCE | 17.74% | ||
| ROIC | 13.86% | ||
| ROICexc | 19.48% | ||
| ROICexgc | 35.74% | ||
| OM | 19.08% | ||
| PM (TTM) | 14.49% | ||
| GM | 41.68% | ||
| FCFM | 16.39% |
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 Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 2.13 | ||
| Debt/EBITDA | 1.58 | ||
| Cap/Depr | 78.34% | ||
| Cap/Sales | 2.4% | ||
| Interest Coverage | 15.76 | ||
| Cash Conversion | 84.85% | ||
| Profit Quality | 113.1% | ||
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z | 2.05 |
F-Score8
WACC7.81%
ROIC/WACC1.78
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)-4.66%
EPS 3Y2.76%
EPS 5Y9.87%
EPS Q2Q%17.65%
EPS Next Y7.44%
EPS Next 2Y9.04%
EPS Next 3Y10.45%
EPS Next 5Y11.09%
Revenue 1Y (TTM)4.07%
Revenue growth 3Y7.82%
Revenue growth 5Y12.34%
Sales Q2Q%5.11%
Revenue Next Year4.43%
Revenue Next 2Y5.21%
Revenue Next 3Y5.81%
Revenue Next 5Y5.57%
EBIT growth 1Y13.21%
EBIT growth 3Y10.05%
EBIT growth 5Y15.61%
EBIT Next Year23.08%
EBIT Next 3Y12.19%
EBIT Next 5Y10.05%
FCF growth 1Y44.75%
FCF growth 3Y11.44%
FCF growth 5Y14.98%
OCF growth 1Y40.55%
OCF growth 3Y8.72%
OCF growth 5Y12.85%