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PayPal Holdings Inc PYPL

Morningstar Rating
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Stock XNAS Rating as of
$67.92 +0.93 (1.39%)
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As of Delayed Price Post-Trading: $67.70 −0.22
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Company Report

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PayPal Earnings: PayPal-Branded Volume Picks Up

Brett Horn

Overall, we think PayPal recorded a strong start to the year. In our view, the key positive was the modest acceleration in growth for PayPal-branded volume. We believe the company’s narrow moat is driven by a scale-based cost advantage. As such, maintaining share in its most profitable business is important to maintain the company’s moat over time. We’re encouraged to see PayPal outperforming expectations now that new CEO Alex Chriss is in place and take this as a positive sign going forward, although the company still has work to do to get fully back on track. We will maintain our $104 fair value estimate and see the shares are undervalued.

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Price vs Fair Value

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PYPL is trading at a 36% discount.
Price
$66.99
Fair Value
$572.00
Uncertainty
High
1-Star Price
$759.70
5-Star Price
$71.90
Economic Moat
Wcqtlkq
Capital Allocation
Nzyfzthd

Bulls Say, Bears Say

Bulls

There is still plenty of runway for growth in electronic payments. Electronic payments only surpassed cash payments on a global basis a couple of years ago.

Bears

The separation between online and point-of-sale transactions is blurring, and PayPal may increasingly come into competition with larger companies in the future.

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News

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Trading Information

Previous Close Price
$66.99
Day Range
$67.22–70.66
52-Week Range
$50.25–76.54
Bid/Ask
$67.65 / $67.70
Market Cap
$71.50 Bil
Volume/Avg
43.9 Mil / 14.6 Mil

Key Statistics

Price/Earnings (Normalized)
13.11
Price/Sales
2.49
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
6.91%

Company Profile

PayPal was spun off from eBay in 2015 and provides electronic payment solutions to merchants and consumers, with a focus on online transactions. The company had 426 million active accounts at the end of 2023. The company also owns Venmo, a person-to-person payment platform.
Sector
Financial Services
Industry
Credit Services
Stock Style Box
Large Value
Total Number of Employees
27,200
Website
https://www.paypal.com

Competitors

Valuation

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Metric
PYPL
SQ
MA
Price/Earnings (Normalized)
 13.1148.2237.28
Price/Book Value
 3.412.4861.62
Price/Sales
 2.492.1117.23
Price/Cash Flow
 12.0458.8231.06
Price/Earnings
PYPL
SQ
MA

Financial Strength

Metric
PYPL
SQ
MA
Quick Ratio
 1.241.630.81
Current Ratio
 1.291.901.17
Interest Coverage
 15.21—24.72
Quick Ratio
PYPL
SQ
MA

Profitability

Metric
PYPL
SQ
MA
Return on Assets (Normalized)
 6.30%3.51%29.19%
Return on Equity (Normalized)
 24.36%6.34%191.08%
Return on Invested Capital (Normalized)
 15.74%4.64%56.34%
Return on Assets
PYPL
SQ
MA
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