Fundamental Analysis
PayPal is the safer, easier way to pay and get paid online. The service allows anyone to pay in any way they prefer, including through credit cards, bank accounts, PayPal Smart Connect or account balances, without sharing financial information.
PayPal has quickly become a global leader in online payment solutions with more than 203 million accounts worldwide. Available in 202 countries and 25 currencies around the world, PayPal enables global ecommerce by making payments possible across different locations, currencies, and languages.
PayPal has received more than 20 awards for excellence from the internet industry and the business community – most recently the 2006 Webby Award for Best Financial Services Site and the 2006 Webby People’s Voice Award for Best Financial Services Site.
Located in San Jose, California, PayPal was founded in 1998.
https://www.paypal.com/cg/webapps/mpp/about
Reasons to buy – Paypal
High level decisions on buy or sell for a stock should be driven by
1. The margin that the company makes. i.e. Out of $1 that the company sells how much does the company taken home.
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- Here we see Paypal makes a margin of 14.5% on Operating Level and about 14% on Net level. This means that out of $1 that it makes $0.14 is being pocketed as profits.
2. The growth rates of the company on revenue, net income, EPS and Dividend. i.e. If it sold $1 last year how much more did it sell this year.
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- Here we see net revenue growth of 24% in the revenue and the net profit figures grew by 33%.
3. The efficiency ratios of the company on Equity and Assets. i.e. How well is the company able to sweat each $1 that it puts to work in the company.
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- Here we see Paypal makes a Return on Assets of 5% and Return of Equity of 14% which is pretty good.
Paypal is the mode of payment for a ton of online payment modes used by companies from WordPress, Amazon etc to a large number of individuals. It would have a ton of competition from apps like Cash, Venmo etc but the security and the backing of a corporate company would mean Paypal continues to increase it’s share as the market expands.
GOLD STANDARD : This is one of the no-debate stocks that are a must have in ones portfolio.
All these ratios can be found in the attached excel sheets and are based on the EDGAR report submitted by lululemon athletica to the SEC. All the data on the above analysis can be found at the link below
Balance Sheet
Income Statement
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