A look at PayPal’s enterprise value and related multiple
PayPal (PYPL) boasted an enterprise value (or EV) of $92.8 billion in 2017. In comparison, eBay (EBAY), Groupon (GRPN), Yelp (YELP), and Square (SQ), PayPal’s peers in the Internet sector, had EVs of $42.2 billion, $2.1 billion, $2.7 billion, and $22.3 billion, respectively.
How does PayPal’s EV compare with its adjusted EBITDA for the last 12 months? Its EV-to-adjusted EBITDA for the trailing 12 months is 28.3x. That compares with 22.7x expected in 2018. PayPal’s EBITDA margin for 2017 was 23%.
A further look at the company’s EV ratios shows that its EV-to-sales ratio for the trailing 12 months is 6.7x against 5.2x anticipated for 2018.
Its trailing-12-month EV-to-cash-flow multiple was 64.9x. That compares to its trailing-12-month EV-to-free-cash-flow multiple of 126.5x.
How much debt does PayPal have?
PayPal’s balance sheet reflects a total debt of $3 billion. It reported capital of $17.6 billion. Its total-debt-to-total capital ratio is 17%. Its debt-to-assets, debt-to-equity, and debt-to-EBITDA ratios are 0.07x, 20.5x, and 0.91x, respectively.
PayPal was the largest Internet player in terms of market capitalization globally at $99 billion, while eBay’s was $37.1 billion. Groupon’s was $2.5 billion, Yelp’s was $3.6 billion, and Square’s was $22.4 billion.
In the trading session on May 28, PYPL stock closed at $80.96, which was close to its mid-Bolinger Band of $78. That implies that the stock is neither overbought nor oversold.