PYPL Stock Overview
PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide.
PayPal Holdings Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$86.97|
|52 Week High||US$278.33|
|52 Week Low||US$67.58|
|1 Month Change||-7.24%|
|3 Month Change||11.96%|
|1 Year Change||-68.73%|
|3 Year Change||-14.90%|
|5 Year Change||35.83%|
|Change since IPO||136.91%|
Recent News & Updates
Visa Or PayPal: A Comparative Analysis
Summary The Seeking Alpha Quant Ranking places Visa ahead of PayPal within the Data Processing and Outsources Services Industry and the Information Technology Sector. The HQC Scorecard indicates that Visa is more attractive than PayPal in terms of Economic Moat, Profitability and Financial Strength. I consider the industry in which Visa and PayPal operate as being highly attractive for investors. In this comparison analysis, I will show you which of the two companies I consider to be the more attractive prospect at this moment in time. I expect a compound annual rate of return of about 14% for Visa and 16% for PayPal. Investment Thesis According to the Seeking Alpha Quant Ranking, Visa (NYSE:V) is ahead of PayPal (NASDAQ:PYPL): in the Data Processing and Outsources Services Industry, Visa is ranked 16th while PayPal is 20th (out of 67). Within the Information Technology Sector, Visa is also in front of PayPal in 118th place while PayPal is ranked 140th (out of 632). Visa scores 82/100 points on the HQC Scorecard, which is a very attractive overall rating in terms of risk and reward. As according to the Scorecard, the company is rated as very attractive in the categories of Economic Moat (89/100), Financial Strength (80/100), Profitability (100/100), Growth (84/100) and Expected Return (100/100). PayPal currently scores 68/100 points as according to the HQC Scorecard, showing an attractive overall rating in terms of risk and reward. The company achieves very attractive results in the categories of Growth (88/100) and Expected Return (80/100). However, when it comes to Profitability (50/100), it’s only rated as moderately attractive. The overall rankings of the HQC Scorecard reinforce my opinion to rate PayPal as a buy and Visa as a strong buy. However, if I had to pick one out of the two, I would choose Visa. Taking into account Visa’s current stock price of $193.30, my DCF Model calculates an Internal Rate of Return of 14% for Visa. Considering PayPal’s current stock price of $94, my DCF Model calculates an Internal Rate of Return of 16% for PayPal. Visa and PayPal’s Competitive Positions In a previous analysis on Visa, I discussed the company’s wide economic moat: “Despite the high profit margins when compared to other industries, it is hard for Visa’s competitors to enter into the market. Visa’s reliable payments network, the company’s technological knowledge as well as its broad network within the financial service industry in combination with a strong brand image, protect the company from additional competitors entering the business segment.” Visa’s high EBIT Margin of 67.48% provides a strong indicator of the company’s excellent competitive position. Its Average Dividend Growth Rate of 17.84% over the last five years shows that the company is on track when it comes to growth. PayPal, however, has shown an even higher Revenue and EBIT Growth Rate [FWD] over the last 5 years: while PayPal has an Average Revenue Growth Rate of 17.55% and an Average EBIT Growth Rate of 21.34% over the last five years, Visa’s 5 Year Average Revenue Growth Rate is 10.83% and its 5 Year Average EBIT Growth Rate is 12.13%. In 2Q22, PayPal released figures that suggest it currently has 429M active accounts including 35M active merchant accounts. At the same time, the company’s Total Payment Volume was $340B in 2Q22 and its Payment Transactions Per Active Account [TPA] were 48.7. This implies an increase of 12% as compared to the same quarter of the previous year. PayPal has been able to create a payment ecosystem, which provides the company with a wide economic moat over its competitors. The company’s high Free Cash Flow Yield of about 4.7% signifies another competitive advantage over less financially strong companies within the digital payment industry. This high Free Cash Flow Yield contributes to my buy rating for the company. The Valuation of Visa and PayPal Discounted Cash Flow [DCF]-Model I have used the DCF Model to determine the intrinsic value of Visa and PayPal. The method calculates a fair value of $248.98 for Visa and $126.06 for PayPal. At the current stock prices, this gives Visa an upside of 28.8% and PayPal an upside of 34.1%. My calculations are based on the following assumptions as presented below (in $ millions except per share items): Visa PayPal Company Ticker V PYPL Revenue Growth Rate for the next 5 years 10% 11% EBIT Growth Rate for the next 5 years 10% 11% Tax Rate 23.4% 19.3% Discount Rate [WACC] 7.50% 8.3% Perpetual Growth Rate 4% 4% EV/EBITDA Multiple 22.7x 23.4x Current Price/Share $193.30 $94 Shares Outstanding 2,069 1,157 Debt $23,795 $11,381 Cash $14,047 $4,583 Capex $883 $806 Source: The Author Based on the above, I calculated the following results: Market Value vs. Intrinsic Value Visa PayPal Market Value $193.30 $94.00 Upside 28.80% 34.10% Intrinsic Value $248.98 $126.06 Source: The Author Internal Rate of Return for Visa The Internal Rate of Return [IRR] is defined as the expected compound annual rate of return that will be earned on an investment. Below you can find the Internal Rate of Return as according to my DCF Model, when assuming different purchase prices for the Visa stock. The lower the purchasing price, the higher the Internal Rate of Return. At Visa's current stock price of $193.30, my DCF Model indicates an Internal Rate of Return of approximately 14%, while assuming a Revenue and EBIT Growth Rate of 10% for the company over the next five years. (In bold you can see the Internal Rate of Return for Visa’s current stock price of $193.30.) Purchase Price of the Visa Stock Internal Rate of Return as according to my DCF Model $150.00 21% $160.00 20% $170.00 18% $180.00 16% $190.00 15% $193.30 14% $200.00 13% $210.00 12% $220.00 11% $230.00 10% $240.00 9% $250.00 7% Source: The Author Internal Rate of Return for PayPal At PayPal’s current stock price of $94, my DCF Model indicates an Internal Rate of Return of 16%, while assuming a Revenue and EBIT Growth Rate of 11% over the next 5 years. (In bold you can see the Internal Rate of Return for PayPal’s current stock price of $94.) Purchase Price of the PayPal Stock Internal Rate of Return as according to my DCF Model $70.00 24% $75.00 22% $80.00 21% $85.00 19% $90.00 17% $94.00 16% $95.00 16% $100.00 14% $105.00 13% $110.00 12% $115.00 11% Source: The Author Relative Valuation Models The P/E [FWD] Ratio for Visa and PayPal Visa’s P/E Ratio is currently 28.36, which is 13.07% below its 5 Year Average (32.62), indicating that the company is currently undervalued. PayPal’s current P/E [FWD] Ratio is 62.57, which is 7.51% above its 5 Year Average of 58.20, showing that PayPal is currently slightly overvalued. Fundamentals: Visa vs. PayPal Visa’s Return on Equity [ROE] of 39.85% is significantly higher than PayPal’s (10.11%). This high ROE is proof that Visa’s management is very efficient in generating income and growth from its equity financing. Visa and PayPal’s relatively high Free Cash Flow Yield [TTM] of 3.96% and 4.7% show that both companies have significant amounts of cash left each year to be able to pay dividends, pay down debt and also to contribute to growth. It's also an indicator of the enormous financial strength of both companies. The low Total Debt to Equity Ratio of 67.06% for Visa and 57.58% for PayPal once again underlines this enormous financial strength. Visa’s EBIT Growth Rate [FWD] of 16.13% and Free Cash Flow Per Share Growth Rate [FWD] of 23.98% are significantly higher in comparison to PayPal (which has an EBIT Growth Rate [FWD] of 16.13% and Free Cash Flow Per Share Growth Rate [FWD] of 11.93%). These Growth Rates confirm my assumption that Visa is currently slightly more attractive than PayPal. Below you can find an overview of some fundamental data for both companies. Visa PayPal Ticker V PYPL Sector Information Technology Information Technology Industry Data Processing and Outsourced Services Data Processing and Outsourced Services Market Cap 412.55B 112.94B Revenue 28.08B 26.39B Revenue 3 Year [CAGR] 8.03% 17.32% Revenue Growth 5 Year [CAGR] 9.59% 17.55% EBITDA 19.79B 4.64B EBIT Margin 67.48% 14.00% ROE 39.85% 10.11% P/E GAAP [FWD] 28.36 62.57 Dividend Yield [FWD] 0.75% - Dividend Growth 3 Yr [CAGR] 14.47% - Dividend Growth 5 Yr [CAGR] 17.84% - Consecutive Years of Dividend Growth 13 Years - Dividend Frequency Quarterly - Source: Seeking Alpha The High-Quality Company [HQC] Scorecard “The aim of the HQC Scorecard that I have developed is to help investors identify companies which are attractive long-term investments in terms of risk and reward.” Here you can find a detailed description of how the HQC Scorecard works. Overview of the Items on the HQC Scorecard “In the graphic below, you can find the individual items and weighting for each category of the HQC Scorecard. A score between 0 and 5 is given (with 0 being the lowest rating and 5 the highest) for each item on the Scorecard. Furthermore, you can see the conditions that must be met for each point of every rated item.” Source: The Author Visa and PayPal According to the HQC Scorecard Source: The Author As according to the HQC Scorecard, Visa scores 82/100 points. This is a very attractive overall scoring in terms of risk and reward. PayPal scores 68/100, resulting in an attractive overall rating when it comes to risk and reward. In the category of Economic Moat, Visa achieves 89/100 points while PayPal gets 74/100. In the category of Financial Strength, Visa scores 80/100 points compared to 61/100 for PayPal. Visa’s higher score in this category is particularly due to its higher credit rating of Aa3 by Moody’s (PayPal has an A3 rating) and also its higher Quick Ratio and Cash Ratio as compared to PayPal. While Visa has a Quick Ratio of 1.05, PayPal’s is only 0.23. Visa’s Cash Ratio was 0.9 in the last quarter, while PayPal’s was just 0.2. Visa’s higher Quick and Cash Ratio as compared to PayPal is evidence that the company has a stronger ability to meet its short-term obligations. In terms of Profitability, Visa shows very attractive results by achieving 100/100 points while PayPal only shows moderately attractive results (50/100). The scorings in this category are a result of Visa’s higher EBIT Margin (67.48% as compared to PayPal’s 14.00%) and its higher ROE (39.85% as compared to PayPal’s 10.11%). In the categories of Valuation, Visa (76/100 points) and PayPal (68/100) achieve attractive results. This is particularly due to the upside potential that my DCF Model shows for both companies. In terms of Growth and Expected Return, both companies achieve very attractive results. This is especially due to the companies' relatively high Expected Internal Rate of Return (my DCF Model indicates an IRR of 14% for Visa and 16% for PayPal). The companies’ overall ratings as according to the HQC Scorecard, strengthen my opinion to rate PayPal as a buy and Visa as a strong buy; if having to decide between investing in Visa or in PayPal, I would choose Visa. Visa and PayPal According to the Seeking Alpha Quant Factor Grades Taking into account the Seeking Alpha Quant Factor Grades, Visa is rated with a C in terms of Growth while PayPal receives a D+. For Profitability, Visa gets an A+ while PayPal gets an A. The results in these categories reinforce my opinion to look at Visa ahead of PayPal.
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|PYPL||US IT||US Market|
Return vs Industry: PYPL underperformed the US IT industry which returned -38.7% over the past year.
Return vs Market: PYPL underperformed the US Market which returned -21.6% over the past year.
|PYPL Average Weekly Movement||7.2%|
|IT Industry Average Movement||8.0%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.9%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: PYPL is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.
Volatility Over Time: PYPL's weekly volatility (7%) has been stable over the past year.
About the Company
PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company's payments platform allows consumers to send and receive payments in approximately 200 markets and in approximately 100 currencies, withdraw funds to their bank accounts in 56 currencies, and hold balances in their PayPal accounts in 25 currencies.
PayPal Holdings Fundamentals Summary
|PYPL fundamental statistics|
Is PYPL overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|PYPL income statement (TTM)|
|Cost of Revenue||US$14.92b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||1.78|
|Net Profit Margin||7.79%|
How did PYPL perform over the long term?See historical performance and comparison
Is PYPL undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 4/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for PYPL?
Other financial metrics that can be useful for relative valuation.
|What is PYPL's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does PYPL's PE Ratio compare to its peers?
|PYPL PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
FIS Fidelity National Information Services
PYPL PayPal Holdings
Price-To-Earnings vs Peers: PYPL is expensive based on its Price-To-Earnings Ratio (48.9x) compared to the peer average (36.1x).
Price to Earnings Ratio vs Industry
How does PYPL's PE Ratio compare vs other companies in the US IT Industry?
Price-To-Earnings vs Industry: PYPL is expensive based on its Price-To-Earnings Ratio (48.9x) compared to the US IT industry average (26.1x)
Price to Earnings Ratio vs Fair Ratio
What is PYPL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||48.9x|
|Fair PE Ratio||49.7x|
Price-To-Earnings vs Fair Ratio: PYPL is good value based on its Price-To-Earnings Ratio (48.9x) compared to the estimated Fair Price-To-Earnings Ratio (49.7x).
Share Price vs Fair Value
What is the Fair Price of PYPL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: PYPL ($86.97) is trading below our estimate of fair value ($137.88)
Significantly Below Fair Value: PYPL is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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How is PayPal Holdings forecast to perform in the next 1 to 3 years based on estimates from 46 analysts?
Future Growth Score5/6
Future Growth Score 5/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: PYPL's forecast earnings growth (27.9% per year) is above the savings rate (1.9%).
Earnings vs Market: PYPL's earnings (27.9% per year) are forecast to grow faster than the US market (14.7% per year).
High Growth Earnings: PYPL's earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: PYPL's revenue (12.8% per year) is forecast to grow faster than the US market (7.6% per year).
High Growth Revenue: PYPL's revenue (12.8% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: PYPL's Return on Equity is forecast to be high in 3 years time (20.6%)
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How has PayPal Holdings performed over the past 5 years?
Past Performance Score1/6
Past Performance Score 1/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: PYPL has a large one-off loss of $1.1B impacting its June 30 2022 financial results.
Growing Profit Margin: PYPL's current net profit margins (7.8%) are lower than last year (20.4%).
Past Earnings Growth Analysis
Earnings Trend: PYPL's earnings have grown by 19.7% per year over the past 5 years.
Accelerating Growth: PYPL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: PYPL had negative earnings growth (-57.8%) over the past year, making it difficult to compare to the IT industry average (19.8%).
Return on Equity
High ROE: PYPL's Return on Equity (10.4%) is considered low.
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How is PayPal Holdings's financial position?
Financial Health Score5/6
Financial Health Score 5/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: PYPL's short term assets ($55.3B) exceed its short term liabilities ($45.1B).
Long Term Liabilities: PYPL's short term assets ($55.3B) exceed its long term liabilities ($12.9B).
Debt to Equity History and Analysis
Debt Level: PYPL's net debt to equity ratio (6.6%) is considered satisfactory.
Reducing Debt: Insufficient data to determine if PYPL's debt to equity ratio has reduced over the past 5 years.
Debt Coverage: PYPL's debt is well covered by operating cash flow (56.4%).
Interest Coverage: PYPL's interest payments on its debt are well covered by EBIT (21.2x coverage).
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What is PayPal Holdings's current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
Notable Dividend: Unable to evaluate PYPL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate PYPL's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if PYPL's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if PYPL's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as PYPL has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Dan Schulman (64 yo)
Mr. Daniel H. Schulman, also known as Dan, has been the President of PayPal Holdings, Inc. since September 30, 2014 and has been its Chief Executive Officer since July 2015 and served as Chief Executive Of...
CEO Compensation Analysis
Compensation vs Market: Dan's total compensation ($USD32.07M) is above average for companies of similar size in the US market ($USD13.05M).
Compensation vs Earnings: Dan's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
Experienced Management: PYPL's management team is considered experienced (2.5 years average tenure).
Experienced Board: PYPL's board of directors are considered experienced (7.2 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: PYPL insiders have only sold shares in the past 3 months.
Recent Insider Transactions
|04 Aug 22||SellUS$2,131,596||Peggy Alford||Individual||21,791||US$97.82|
|06 May 22||BuyUS$597,229||Mark Britto||Individual||7,370||US$81.04|
|04 May 22||BuyUS$96,947||Enrique Lores||Individual||1,100||US$88.13|
|18 Feb 22||BuyUS$467,834||Frank Yeary||Individual||4,500||US$103.96|
|08 Feb 22||BuyUS$1,002,372||David Dorman||Individual||8,400||US$119.33|
|04 Feb 22||BuyUS$499,400||Frank Yeary||Individual||4,000||US$124.85|
|03 Feb 22||BuyUS$995,842||Daniel Schulman||Individual||7,994||US$125.18|
|03 Dec 21||BuyUS$498,822||Enrique Lores||Individual||2,770||US$180.08|
|23 Nov 21||BuyUS$288,469||David Dorman||Individual||1,547||US$186.47|
|09 Nov 21||BuyUS$1,999,228||John Donahoe||Individual||9,780||US$204.42|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
PayPal Holdings, Inc.'s employee growth, exchange listings and data sources
- Name: PayPal Holdings, Inc.
- Ticker: PYPL
- Exchange: NasdaqGS
- Founded: 1998
- Industry: Data Processing and Outsourced Services
- Sector: Software
- Implied Market Cap: US$100.579b
- Shares outstanding: 1.16b
- Website: https://www.paypal.com
Number of Employees
- PayPal Holdings, Inc.
- 2211 North First Street
- San Jose
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|PYPL||NasdaqGS (Nasdaq Global Select)||Yes||Common Stock||US||USD||Jul 2015|
|2PP||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Jul 2015|
|2PP||XTRA (XETRA Trading Platform)||Yes||Common Stock||DE||EUR||Jul 2015|
|PYPL *||BMV (Bolsa Mexicana de Valores)||Yes||Common Stock||MX||MXN||Jul 2015|
|0R9U||LSE (London Stock Exchange)||Yes||Common Stock||GB||USD||Jul 2015|
|PYPL||SWX (SIX Swiss Exchange)||Yes||Common Stock||CH||CHF||Jul 2015|
|PYPL-U||ETLX (Eurotlx)||Yes||Common Stock||IT||EUR||Jul 2015|
|PYPL||WBAG (Wiener Boerse AG)||Yes||Common Stock||AT||EUR||Jul 2015|
|PYPL||BVL (Bolsa de Valores de Lima)||Yes||Common Stock||PE||USD||Jul 2015|
|2PP||BUL (Bulgaria Stock Exchange)||Yes||Common Stock||BG||EUR||Jul 2015|
|PYPL_KZ||KAS (Kazakhstan Stock Exchange)||Yes||Common Stock||KZ||USD||Jul 2015|
|PYPL||BASE (Buenos Aires Stock Exchange)||CEDEAR EAC 8 REP 1(USD)||AR||ARS||Apr 2019|
|PYPLD||BASE (Buenos Aires Stock Exchange)||CEDEAR EAC 8 REP 1(USD)||AR||USD||Apr 2019|
|PYPL34||BOVESPA (Bolsa de Valores de Sao Paulo)||BDR EACH 20 REP 1 COM||BR||BRL||May 2019|
|PYPL||NEOE (Aequitas Neo Exchange)||PAYPAL CDR CAD HDG REG S||CA||CAD||Oct 2021|
|2PP0||DB (Deutsche Boerse AG)||PAYPAL CDR CAD HDG REG S||DE||EUR||Oct 2021|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/23 00:00|
|End of Day Share Price||2022/09/23 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.