Paypal Stock Analysis, Valuation (NASDAQ:PYPL)

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$85.45 $0.13 (0.15%) PYPL stock closing price Aug 17, 2018 (Closing)

View the Paypal stock analysis video on Amigobulls. This is our analyst opinion covering the buy and sell arguments for PYPL stock.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Paypal Holdings Inc Stock Rating 2.8/5

Amigobulls PYPL stock analysis takes into account various financial ratios like relative valuation, Paypal revenue, growth and return on equity based on latest quarter 2018 Q2 financial statements. We also check Paypal dividend performance. We also use relative valuation metrics like PE ratio and price to sales ratio for Paypal valuation analysis. Paypal stock rating is our opinion about the business fundamentals of the company.

Should you buy PYPL stock?

  • Paypal's revenue growth came in at 23% in 2018-06.
  • Paypal's average operating margin of 16.33 was exceptional.
  • LTM Net margins were good at 14% for Paypal.
  • With a debt/equity ratio of 0.13, Paypal is comparatively less leveraged than its peers in the Computer and Technology sector.
  • Paypal generates a high return on invested capital of 17.4.
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for Paypal at 13.4.

Should you sell PYPL stock?

  • Cash flow from operations is 0.0532 times net income which is a negative signal.
  • Trading at a PE ratio of 52.3, PYPL stock is overvalued in comparison to sector average multiple of 25.4.
  • The company is trading at a price to sales multiple of 7, which is overvalued in comparison to the Computer and Technology sector average multiple of 2.9.
  • The company has negative Free Cash Flows (FCF), with a negative FCF margin of -4.4.

Comments on this video and Paypal stock

Investors can use Amigobulls Paypal stock analysis as a tool to arrive at accurate conclusions regarding financial health of the company and its valuation. Fundamentals of a company give detailed information which helps in making invesment decisions.

Paypal revenue growth and profit or net income are the main underlying forces which could detremine the direction of the share price. Along with fundamentals, investors can utilize technical analysis to get a better idea about the price trend of Paypal stock.