PayPal Holdings, Inc.
PayPal Holdings, Inc. Fundamental Analysis
PayPal Holdings, Inc. (2PP.F) shows strong financial fundamentals with a PE ratio of 8.02, profit margin of 15.70%, and ROE of 25.87%. The company generates $33.0B in annual revenue with moderate year-over-year growth of 6.81%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 67.7/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze 2PP.F's fundamental strength across five key dimensions:
Efficiency Score
Weak2PP.F struggles to generate sufficient returns from assets.
Valuation Score
Excellent2PP.F trades at attractive valuation levels.
Growth Score
Moderate2PP.F shows steady but slowing expansion.
Financial Health Score
Excellent2PP.F maintains a strong and stable balance sheet.
Profitability Score
Excellent2PP.F achieves industry-leading margins.
Key Financial Metrics
Is 2PP.F Expensive or Cheap?
P/E Ratio
2PP.F trades at 8.02 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, 2PP.F's PEG of 0.84 indicates potential undervaluation.
Price to Book
The market values PayPal Holdings, Inc. at 2.07 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 4.87 times EBITDA. This is generally considered low.
How Well Does 2PP.F Make Money?
Net Profit Margin
For every $100 in sales, PayPal Holdings, Inc. keeps $15.70 as profit after all expenses.
Operating Margin
Core operations generate 18.68 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $25.87 in profit for every $100 of shareholder equity.
ROA
PayPal Holdings, Inc. generates $6.53 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
PayPal Holdings, Inc. produces operating cash flow of $6.34B, showing steady but balanced cash generation.
Free Cash Flow
PayPal Holdings, Inc. generates strong free cash flow of $5.50B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.98 in free cash annually.
FCF Yield
2PP.F converts 13.41% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.02
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.84
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.07
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.25
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.62
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.29
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.26
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How 2PP.F Stacks Against Its Sector Peers
| Metric | 2PP.F Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.02 | 18.66 | Better (Cheaper) |
| ROE | 25.87% | 806.00% | Weak |
| Net Margin | 15.70% | -451.00% (disorted) | Strong |
| Debt/Equity | 0.62 | 1.00 | Strong (Low Leverage) |
| Current Ratio | 1.29 | 662.02 | Neutral |
| ROA | 6.53% | -24409.00% (disorted) | Weak |
2PP.F outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews PayPal Holdings, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
104.13%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
92.41%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
108.79%
Industry Style: Value, Dividend, Cyclical
High Growth