PayPal Story

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PYPL -- USA Stock  

USD 203.04  0.89  0.44%

PayPal Holdings is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 28th of October 2020. PayPal Holdings Cash and Equivalents Turnover is relatively stable at the moment as compared to the past year. The company's current value of Cash and Equivalents Turnover is estimated at 2.44. Return on Investment is expected to hike to 15.71 this year, although the value of Revenue Per Employee will most likely fall to nearly 672 K. As many millenniums are trying to avoid financial services space, it makes sense to summarize PayPal Holdings a little further and try to understand its current market patterns. We will evaluate why recent PayPal Holdings price moves suggest a bounce in November.
Published six days ago
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Should I exit my PayPal (NASDAQ:PYPL) position?
This firm currently holds 9.67 B in liabilities with Debt to Equity (D/E) ratio of 0.55, which is about average as compared to similar companies. Macroaxis provides advice on PayPal Holdings to complement and cross-verify current analyst consensus on PayPal Holdings. Our recommendation engine determines the firm's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon.
PayPal Holdings financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of PayPal Holdings, including all of PayPal Holdings's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of PayPal Holdings assets, the company is considered highly leveraged. Understanding the composition and structure of overall PayPal Holdings debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding PayPal Total Liabilities

PayPal Holdings liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. PayPal Holdings has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on PayPal Holdings balance sheet include debt obligations and money owed to different PayPal Holdings vendors, workers, and loan providers. Below is the chart of PayPal short long-term liabilities accounts currently reported on its balance sheet.
You can use PayPal Holdings financial leverage analysis tool to get a better grip on understanding its financial position

How important is PayPal Holdings's Liquidity

PayPal Holdings financial leverage refers to using borrowed capital as a funding source to finance PayPal Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. PayPal Holdings financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between PayPal Holdings's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for PayPal Holdings, but it might be worth checking our own buy vs. sell analysis

Breaking down PayPal Holdings Indicators

The company reported the previous year's revenue of 19.22 B. Net Income was 2.58 B with profit before overhead, payroll, taxes, and interest of 7.99 B.

Asset Breakdown

Assets Non Current
31.2 B
Current Assets
Total Assets41.36 Billion
Current Assets31.25 Billion
Assets Non Current6.07 Billion
Goodwill3.65 Billion

Some PayPal technical indicators suggest throwback

Treynor Ratio just dropped to -1.99, may denote upcoming price decrease. PayPal Holdings shows above-average downside volatility for the selected time horizon. We advise investors to inspect PayPal Holdings further and ensure that all market timing and asset allocation strategies are consistent with the estimation of PayPal Holdings future alpha.

Our Final Take On PayPal Holdings

While some other entities within the credit services industry are still a little expensive, even after the recent corrections, PayPal Holdings may offer a potential longer-term growth to stakeholders. To conclude, as of the 17th of October 2020, our primary 30 days buy-hold-sell recommendation on the company is Hold. We believe PayPal Holdings is fairly valued with very small probability of distress for the next two years.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of PayPal Holdings. Please refer to our Terms of Use for any information regarding our disclosure principles.

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