_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Paypal Holdings, Inc. (XNAS:PYPL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PYPL
Name:
PAYPAL HOLDINGS, INC. (XNAS:PYPL)
Sector:
1.05B
Industry:
Credit Services
CEO:
Mr. Daniel Schulman
Total Employees:
30,900
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 856.38% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PAYPAL HOLDINGS, INC.(PYPL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
91.13
One Month Price Target:
$91.87
Six Month Price Target :
$95.55
Likely Price in One Year's Time:
Ticker:
$99.97
Likely Trading Range Today Under (Normal Volatility)
$90.67
Price Upper limit ($) :
$91.65
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$85.24
This week:
$77.96
This month :
$64.79
Other Primary facts
Market Cap:
105.39B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.16B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.11%
-24.59%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$118.47
$105.98
$63.79
$76.28
Medium risk (<10%) entry points
Buy Call
Sell Call
$101.92
Buy Put:
Sell Put:
$99.25
$80.31
$83.01
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PYPL
Sharpe Ratio:
0.65%
Comparison:
PYPL, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -65.26% lower than the industry
& is -71.67% lower than the market/S&P 500 average
Average Returns/Yield of
PYPL
Daily returns:
0.03%
Weekly returns:
0.15%
Monthly returns:
0.59%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -63.16% below industry average
Classification:
PYPL, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.5
Statistical test of Returns:
PYPL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.16%
Weekly Volatility:
7.07%
Monthly Volatility:
14.14%
Yearly Volatility:
48.97%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.51%
Volatility in last five trading days has been -52.32% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.46%
Weekly VaR:
-14.45%
Monthly VaR:
-28.90%
How Much Can the price of
PYPL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$68.14
This translates to price declining to:
$13.67
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
PYPL is a 103.98% riskier investment compared to the market/S&P 500 & is 74.75% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -4.21% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PYPL
Beta in relation to market/S&P 500--1.44
Expected beta in 1 year's time:
0.878
Expected beta in 3 year's time:
1.241
Unlevered (debt free) Beta:
1.054
Beta in relation to Nasdaq (XNAS):
1.312
Beta in relation to all global stocks::
0.9
Beta Comparison & Analysis
Beta of competitors/peers::
0.934
Beta is 54.62% higher than peers
Average Industry Beta:
1.332
Beta is 8.40% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
19.81%
Sustainable growth rate is -41.27% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.060
Alpha is -188.65% below industry average alpha yield
Alpha is -383% below the market average
Analysis of Cost of Capital of
PYPL
Equity cost of capital:
0.130
Equity cost of capital is 6.24% above industry mean WACC
Unlevered (without debt) cost of capital:
9.52%
Before-tax cost of debt:
2.53%
After-tax cost of debt:
2.00%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
2.00%
WACC is 43.99% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$22.33
Revenue growth rate per share of (3Y):
5.12
Annual revenue growth rate is -60.02% below industry average
EPS:
$3.03
Expected Annual growth rate of EPS (3Y):
18.98%
Expected future EPS growth rate is -24.27% lower than the Credit Services industry
Free cash flow (FCF) per share:
$4.12
-
-
Debt per share
$7.11
EBITDA per share
$4.65
Valuation Analysis Today of
PYPL
P/E Ratio:
52.6
P/E Ratio of Competitors/Peers:
15.13
P/E ratio is 247.68% higher than main peers & is 333.33% higher than the industry
Stock price/value with industry average P/E ratio: $36.78
PYPL is 147.79% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
4.08
Price to sales ratio is -21.48% below the industry mean
P/B (Price to book value ratio):
5.12
Price to free cash flow: 22.11
Price to free cash flow ratio is -38.52% lower than the industry
Net income growth rate (3Y):
104.40%
Net income growth rate is 546.37% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
39.91%
Net debt to equity ratio:
21.16%
Debt to assets ratio:
10.85%
Net debt to assets ratio:
5.75%
Debt-to-asset ratio is -86.09% below industry average
Ability to repay debt:
Interest coverage ratio:
23.1
Interest coverage ratio is 135.14% more than industry average
Looking forward:
Debt growth rate:
1.22%
Annual debt growth is -98% lower than industry average debt growth rate
Debt repayment rate in last quarter: 1.25%
Analysis of Key Statistics
Correlation of price movement with the market:
0.673
Statistical significance of correlation:
PYPL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is 19.96% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
-0.08
Covariance of price movement with the market:
-0.147
Kurtosis
7.794
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.413
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PYPL
Gross Profit Margin Ratio:
214%
Operating Profit Margin Ratio:
15.22%
Operating profit margin is -47.64% lower than the industry
Net Profit Margin Ratio:
214%
Effective Tax Rate:
7.13%
Effective tax rate is -67.06% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
17.38%
Return on equity (ROE) is -59.00% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.72%
Return on assets (ROA) is -22.04% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
1.19
Current ratio is -79.38% below industry average
Cash Conversion Cycle (days):
-596.9
Cash conversion cycle is -549.79% below industry average
The remaining useful life of property plant & equipment is: 20.9 years
Stock based compensation to net income ratio:
11.98%
In-depth Efficiency Analysis
Revenue generated per employee:
835.6K
Each employee generates 15% more revenue than industry average revenue per employee
EBITDA generated per employee:
174.2K
Each employee generates -58% less EBITDA than industry average revenue per employee
Profit generated per employee:
115.9K
Each employee generates -52% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
34.0K
Each employee generates -42% less free cash flow than industry average revenue per employee
Assets/Capital per employee
758.0K
Each employee generates -42% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PYPL
CME GROUP INC. (XNAS:CME)
BRIGHT LIGHTS ACQUISITION UNT (XNAS:BLTSU)
GRNVU
T. ROWE PRICE GROUP, INC. (XNAS:TROW)
FIFTH THIRD BANCORP (XNAS:FITB)
Willis Towers Watson Public Limited Company (XNAS:WTW)
FIRST RESERVE SUSTAINABLE GROWTH UNT (XNAS:FRSGU)
FORUM MERGER IV UNT (XNAS:FMIVU)
-
Current Analyst Ratings
Strong buy�58%
Buy�75%
Hold�50%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
25.82B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
12.01B
13.81B
1.61B
5.79B
8.23B
2.44B
-
9.84B
57.00M
233.00M
1.29B
5.38B
3.93B
3.58B
3.86B
275.00M
3.58B
Statement of Cash Flow
Date:
Period:
328.00M
Differed Income Tax :
- 16000.00K
Stock Based Compensation :
429.00M
Change in Working Capital :
- 437000.00K
Accounts Receivables:
- 50000.00K
Other Working Capital:
- 375000.00K
Other Non-Cash Items:
429.00M
Net Cash Provided by Operating Activities:
1.24B
Investments in PP&E:
- 191000.00K
Net Acquisitions:
-
Purchases of Investments:
- 8604000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
4.86B
3.10B
7.97B
43.12B
-
1.30B
52.38B
1.86B
11.37B
1.19B
7.15B
-
1.86B
23.42B
-
75.81B
39.89B
999.00M
253.00M
-
3.08B
43.97B
8.22B
-
11.24B
-
55.20B
-
17.04B
- 444000.0K
-
March 31, 2022 at 6:00:00 AM
21.85B
20.60B
75.81B
10.25B
9.22B
4.4B
8.75B
- 707000.00K
- 751000.00K
- 104000.00K
3.00M
- 1500000.00K
-
906.00M
- 695000.00K
18.00M
- 186000.00K
17.84B
18.03B
1.24B
- 191000.00K
1.05B
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
PYPL
2023
2024
2025
2026
2027
$123.52
$135.50
$148.65
$163.08
$178.90