YPL) reported earnings per share of $1.19 and revenue of $8.37 billion, exceeding analysts' expectations.PayPal Holdings, Inc. (NASDAQYPL) is a leading fintech company known for its digital payment solutions. It offers services like online money transfers and operates platforms such as Venmo. PayPal competes with other payment giants like Square and Stripe. On February 3, 2025, PayPal reported earnings per share of $1.19, surpassing the estimated $1.11, and revenue of approximately $8.37 billion, exceeding the estimated $8.27 billion.
Despite these positive earnings results, PayPal's stock has experienced a 6% decline. This drop is attributed to the company's performance in branded-checkout volume, which has not met buy-side expectations, as highlighted by an analyst. This shortfall in a key growth metric is contributing to the downward pressure on the stock.
PayPal's fourth-quarter earnings announcement showcased a successful refresh strategy, with the company surpassing analysts' expectations in both earnings and revenue. The company also provided guidance that exceeded market estimates, indicating a positive outlook. Growth at Venmo, PayPal's popular peer-to-peer payment service, contributed significantly to these strong results.
PayPal's financial metrics provide insight into its market valuation. The company has a price-to-earnings (P/E) ratio of approximately 21.52, indicating the amount investors are willing to pay for each dollar of earnings. Its price-to-sales ratio stands at about 2.82, suggesting the market values its sales at this multiple. The enterprise value to sales ratio is around 2.93, reflecting the company's total valuation relative to its sales.
The enterprise value to operating cash flow ratio is approximately 12.49, indicating how much investors are paying for each dollar of cash flow from operations. PayPal's earnings yield is about 4.65%, representing the return on investment for shareholders. The debt-to-equity ratio is approximately 0.48, suggesting that PayPal uses a moderate level of debt financing compared to its equity. Lastly, the current ratio is about 1.26, indicating that PayPal has a reasonable level of liquidity to cover its short-term liabilities.
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