Paypal Stock Analysis, Valuation (NASDAQ:PYPL)

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$79.69 $1.99 (2.56%) PYPL stock closing price Feb 23, 2018 (Closing)
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Paypal
Updated on : Feb 23, 2018
previous close
PYPL 79.7 (0%)
NASDAQ 7337.4 (0%)
Closing Price On: Feb 23, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Internet Software
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q4
$billion
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
16.2%
Sector Average:
5.3%
5 Quarter Net Profit
Net Margins
2017-Q4
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
1B
Debt/Equity Ratio:
 0.06
Compared to the industry
Cash Flow
Operating cash flow:
-$147M
Net Income:
$620M
PROS      CONS
Recent Growth
Operating Margins
Net Margins
Low Debt Burden
ROIC
ROE
Cash Flow
FCF Margin
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
PYPL PS :
7.3
Industry PS :
2.8
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
16.4%
Return on Equity:
11.8%
Free Cash Flow Margin:
-8.7%
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Paypal Stock Analysis

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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 2017 Q4 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?

  • The Year Over Year (YoY) revenue growth for Paypal was 25.6% in 2017 Q4.
  • The TTM operating margin was good at 16.2% for Paypal.
  • Net margins came in at average 13.7% for Paypal over the last twelve months.
  • With a debt/equity ratio of  0.06, Paypal is comparatively less leveraged than its peers in the Computer and Technology sector.
  • Paypal has an attractive ROIC (Return on Invested Capital) of 16.4%
  • The LTM ROE of 11.8% for Paypal is attractive.

Should you sell PYPL stock?

  • Trading at a PE ratio of 54.6, PYPL stock is overvalued in comparison to industry average multiple of 25.4.
  • The company is trading at a price to sales multiple of 7.3, which is overvalued in comparison to the Internet Software industry average multiple of 2.8.
  • The company has a negative free cash flow margin of -8.7%.

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.