It's time to talk about another strong company taking advantage of the digital revolution. Here is the breakdown on $PYPL, otherwise known as PayPal.
Current Price: $202.87
52/Wk High: $212.45
52/Wk Low: $82.07
Market Cap: $237.6 billion
Read below for the breakdown!
PayPal is a digital payment and a well-known technology company. PayPal’s vast platform offers customers the ability to make mobile and digital payments, transfer funds directly from the customer’s connected bank account, and much more.
PayPal operates under multiple solutions which include PayPal and PayPal Credit, Xoom, Braintree, Venmo, and Paydiant. Given its vast array of offerings, PayPal is one of the strongest players within the digital payment space.
Since the March lows, PayPal stock has exploded, increasing from a COVID-19 low of roughly $82/share to its current price of $202/share. Given its huge run since March, many are raising the question of whether the stock is still buyable.
Taking a look at the most recent earnings numbers, PayPal reported a Q2 beat, coming off of a Q1 loss, the first loss after nine consecutive beats.
PayPal reported a Q2 EPS of $1.07 versus the analyst’s consensus expectation of $0.88. Furthermore, revenue continued to trend upward throughout Q2, totaling $5.3 billion (22.21% YOY growth).
Not only did PayPal beat on Q2 earnings but management further raised guidance for the full year of 2020.
Management expects Q3 revenues to grow 23% along with full-year revenues to grow 20%. Furthermore, management expects full-year GAAP EPS to grow 25% on the year.
Taking a look at the balance sheet, management has done a solid job;
Total Debt: $8.934 billion
Total Liabilities: $45.526 billion
Total Assets: $63.166 billion
Cash & Short Term Inv: $13.048 billion
Based on the balance sheet PayPal is solid fundamentally. Total Debt has maintained low growth while Assets and Cash levels are continually increasing.
Digging into the price of the stock itself, PayPal is running at pricy multiples;
Price to Earnings: 91.82x
Price to Sales: 12.22x
Price to Book: 13.30x
Price to Cash Flow: 32.05x
Given the multiples, PayPal is trading quite expensively, something to be aware of if opening a position in the name.
Although the numbers throughout the past two quarters have been mixed, analysts remain bullish. Currently, the mean price target on PayPal is $222.52/share, representing a 9.41% gain.
Secondly, the high price target is $290.00/share, representing a 42.59% gain while the low price target is $201.00/share, representing a -1.17% loss.
The big money is just as bullish as the analysts as well. Currently, 84.28% of PayPal is owned by institutions. Top holders include The Vanguard Group, BlackRock Institutional Trust, and State Street Global Advisors.
Taking a look at the charts the technicals could be flashing an opportunity. Based on the six-month charts the MACD is currently running upward with minimal momentum at a range of 3.46 down to 2.63.
The six-month RSI is running flat at 57.29 while the CCI continues to run hot at 85.45. It is also important to note that PayPal trades roughly 10 points off its highs.
Overall PayPal seems to be an excellent long-term play given the expected growth, resilience to the pandemic, and solid balance sheet.
On the otherhand, in the short term, PayPal could see strong volatility and price swings due to the mass uncertainty within the markets.
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Disclaimer: This is not direct financial advice, simply an opinion based on independent research.