PYPL

Financial health: Strong8.2/10

8 strengths, 1 concern. Weakest points: earnings growth.

• Debt to equity: 0.49 (Strong, benchmark < 0.5) — Debt of 0.49x equity is conservative against the 0.5x benchmark. It has been broadly flat over the last 4 years.
• Net debt vs cash flow: 0.0y (Strong, benchmark < 4 years) — Holds more cash than debt ($435.0M net cash).
• Current ratio: 1.29 (Watch, benchmark > 1.5) — Short-term assets cover 1.29x short-term liabilities, against Graham's 1.5x floor. It has been broadly flat over the last 4 years.
• Return on equity: 23.8% (Strong, benchmark > 15%) — Earns 23.8% on shareholder equity, comfortably past the > 15% mark.
• Gross margin: 40.6% (Strong, benchmark > 40%) — Keeps 40.6% of revenue after the direct cost of sales, comfortably past the > 40% mark.
• Net margin: 13.8% (Strong, benchmark > 10%) — Turns 13.8% of revenue into profit, comfortably past the > 10% mark.
• Free cash flow: $5.6B (Strong, benchmark positive) — Generated $5.6B of free cash flow after capital spending. It has been broadly flat over the last 4 years.
• Revenue growth: 2.0% (Watch, benchmark > 10%) — Revenue changed 2.0% year on year, short of the > 10% mark.
• Earnings growth: -3.8% (Concern, benchmark > 10%) — Earnings changed -3.8% year on year, well short of the > 10% mark.
• PEG ratio: 0.95 (Strong, benchmark < 1) — At 0.95, the price looks cheap relative to expected growth — Lynch treated 1.0 as fair value.
• Payout ratio: 10.7% (Strong, benchmark < 60%) — Pays out 10.7% of earnings as dividends, leaving room to keep paying.