Paypal Stock Analysis, Valuation (NASDAQ:PYPL)

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$64.74 $0.91 (1.43%) PYPL stock closing price Sep 20, 2017 (Closing)
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Paypal
Updated on : Sep 20, 2017
previous close
PYPL 64.7 (0%)
NASDAQ 6456 (0%)
Closing Price On: Sep 20, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Internet Software
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q2
$billion
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
14.2%
Sector Average:
5.8%
5 Quarter Net Profit
Net Margins
2017-Q2
%
LTM Margin
Compared to the industry
Cash Flow
Operating cash flow:
$921M
Net Income:
$411M
PROS      CONS
Recent Growth
Operating Margins
Net Margins
Cash Flow
ROIC
ROE
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
PYPL PS :
6.6
Industry PS :
2.7
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
14.9%
Return on Equity:
10.4%
Free Cash Flow Margin:
23.8%
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Paypal Analysis Video

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

Paypal Holdings Inc Stock Rating (2.8/5)

Our Paypal stock opinion is based on fundamentals of the company. This Paypal stock analysis is based on latest 2017 Q2 earnings. The stock price analysis takes into account the company's valuation metrics.

Should you buy PYPL stock?

  • Paypal's revenue growth came in at 18.3% in 2017 Q2.
  • The TTM operating margin was good at 14.2% for Paypal.
  • Net margins came in at average 12.8% for Paypal over the last twelve months.
  • The company has an operating cash flow which is 2.2 times the net income. We see this as a positive signal.
  • Paypal's return on invested capital of 14.9% is good.
  • The LTM ROE of 10.4% for Paypal is attractive.
  • The company has a healthy free cash flow margin of 23.8%.

Should you sell PYPL stock?

  • Trading at a PE ratio of 48, PYPL stock is overvalued in comparison to industry average multiple of 26.2.
  • The company is trading at a price to sales multiple of 6.6, which is higher in comparison to the Internet Software industry average of 2.7, making PYPL stock expensive.

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