PayPal trades at $75.20 per share and has stayed right on track with the overall market, gaining 31% over the last six months. At the same time, the S&P 500 has returned 34.7%.
Is now a good time to buy PYPL? Find out in our full research report, it’s free for active Edge members.
Why Do Investors Watch PYPL Stock?
Originally spun off from eBay in 2015 after being acquired by the auction giant in 2002, PayPal (NASDAQ: PYPL) operates a global digital payments platform that enables consumers and merchants to send, receive, and process payments online and in person.
Three Positive Attributes:
1. Long-Term Revenue Growth Shows Momentum
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
Luckily, PayPal’s revenue grew at a decent 10.9% compounded annual growth rate over the last five years. Its growth was slightly above the average financials company and shows its offerings resonate with customers.
2. EPS Growth Shows Decent Momentum Over the Last Two Years
While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.
PayPal’s EPS grew at a decent 12.6% compounded annual growth rate over the last two years, higher than its 6.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.
Over the last five years, PayPal has averaged an ROE of 20%, excellent for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows PayPal has a strong competitive moat.
Final Judgment
PayPal possesses several positive attributes, but at $75.20 per share (or 13.8× forward P/E), is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More Than PayPal
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