Stock Analysis on Net

PayPal Holdings Inc. (NASDAQ:PYPL)

This company has been moved to the archive! The financial data has not been updated since May 9, 2023.

Capital Asset Pricing Model (CAPM)

Microsoft Excel

Rates of Return

PayPal Holdings Inc., monthly rates of return

Microsoft Excel
PayPal Holdings Inc. (PYPL) Standard & Poor’s 500 (S&P 500)
t Date PricePYPL,t1 DividendPYPL,t1 RPYPL,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2018 $85.32 2,823.81
1. Feb 28, 2018 $79.41 -6.93% 2,713.83 -3.89%
2. Mar 31, 2018 $75.87 -4.46% 2,640.87 -2.69%
3. Apr 30, 2018 $74.61 -1.66% 2,648.05 0.27%
. . . . . . .
. . . . . . .
. . . . . . .
58. Nov 30, 2022 $78.41 -6.19% 4,080.11 5.38%
59. Dec 31, 2022 $71.22 -9.17% 3,839.50 -5.90%
Average (R): 0.32% 0.67%
Standard deviation: 11.11% 5.40%
PayPal Holdings Inc. (PYPL) Standard & Poor’s 500 (S&P 500)
t Date PricePYPL,t1 DividendPYPL,t1 RPYPL,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2018 $85.32 2,823.81
1. Feb 28, 2018 $79.41 -6.93% 2,713.83 -3.89%
2. Mar 31, 2018 $75.87 -4.46% 2,640.87 -2.69%
3. Apr 30, 2018 $74.61 -1.66% 2,648.05 0.27%
4. May 31, 2018 $82.07 10.00% 2,705.27 2.16%
5. Jun 30, 2018 $83.27 1.46% 2,718.37 0.48%
6. Jul 31, 2018 $82.14 -1.36% 2,816.29 3.60%
7. Aug 31, 2018 $92.33 12.41% 2,901.52 3.03%
8. Sep 30, 2018 $87.84 -4.86% 2,913.98 0.43%
9. Oct 31, 2018 $84.19 -4.16% 2,711.74 -6.94%
10. Nov 30, 2018 $85.81 1.92% 2,760.17 1.79%
11. Dec 31, 2018 $84.09 -2.00% 2,506.85 -9.18%
12. Jan 31, 2019 $88.76 5.55% 2,704.10 7.87%
13. Feb 28, 2019 $98.07 10.49% 2,784.49 2.97%
14. Mar 31, 2019 $103.84 5.88% 2,834.40 1.79%
15. Apr 30, 2019 $112.77 8.60% 2,945.83 3.93%
16. May 31, 2019 $109.75 -2.68% 2,752.06 -6.58%
17. Jun 30, 2019 $114.46 4.29% 2,941.76 6.89%
18. Jul 31, 2019 $110.40 -3.55% 2,980.38 1.31%
19. Aug 31, 2019 $109.05 -1.22% 2,926.46 -1.81%
20. Sep 30, 2019 $103.59 -5.01% 2,976.74 1.72%
21. Oct 31, 2019 $104.10 0.49% 3,037.56 2.04%
22. Nov 30, 2019 $108.01 3.76% 3,140.98 3.40%
23. Dec 31, 2019 $108.17 0.15% 3,230.78 2.86%
24. Jan 31, 2020 $113.89 5.29% 3,225.52 -0.16%
25. Feb 29, 2020 $107.99 -5.18% 2,954.22 -8.41%
26. Mar 31, 2020 $95.74 -11.34% 2,584.59 -12.51%
27. Apr 30, 2020 $123.00 28.47% 2,912.43 12.68%
28. May 31, 2020 $155.01 26.02% 3,044.31 4.53%
29. Jun 30, 2020 $174.23 12.40% 3,100.29 1.84%
30. Jul 31, 2020 $196.07 12.54% 3,271.12 5.51%
31. Aug 31, 2020 $204.14 4.12% 3,500.31 7.01%
32. Sep 30, 2020 $197.03 -3.48% 3,363.00 -3.92%
33. Oct 31, 2020 $186.13 -5.53% 3,269.96 -2.77%
34. Nov 30, 2020 $214.12 15.04% 3,621.63 10.75%
35. Dec 31, 2020 $234.20 9.38% 3,756.07 3.71%
36. Jan 31, 2021 $234.31 0.05% 3,714.24 -1.11%
37. Feb 28, 2021 $259.85 10.90% 3,811.15 2.61%
38. Mar 31, 2021 $242.84 -6.55% 3,972.89 4.24%
39. Apr 30, 2021 $262.29 8.01% 4,181.17 5.24%
40. May 31, 2021 $260.02 -0.87% 4,204.11 0.55%
41. Jun 30, 2021 $291.48 12.10% 4,297.50 2.22%
42. Jul 31, 2021 $275.53 -5.47% 4,395.26 2.27%
43. Aug 31, 2021 $288.66 4.77% 4,522.68 2.90%
44. Sep 30, 2021 $260.21 -9.86% 4,307.54 -4.76%
45. Oct 31, 2021 $232.59 -10.61% 4,605.38 6.91%
46. Nov 30, 2021 $184.89 -20.51% 4,567.00 -0.83%
47. Dec 31, 2021 $188.58 2.00% 4,766.18 4.36%
48. Jan 31, 2022 $171.94 -8.82% 4,515.55 -5.26%
49. Feb 28, 2022 $111.93 -34.90% 4,373.94 -3.14%
50. Mar 31, 2022 $115.65 3.32% 4,530.41 3.58%
51. Apr 30, 2022 $87.93 -23.97% 4,131.93 -8.80%
52. May 31, 2022 $85.21 -3.09% 4,132.15 0.01%
53. Jun 30, 2022 $69.84 -18.04% 3,785.38 -8.39%
54. Jul 31, 2022 $86.53 23.90% 4,130.29 9.11%
55. Aug 31, 2022 $93.44 7.99% 3,955.00 -4.24%
56. Sep 30, 2022 $86.07 -7.89% 3,585.62 -9.34%
57. Oct 31, 2022 $83.58 -2.89% 3,871.98 7.99%
58. Nov 30, 2022 $78.41 -6.19% 4,080.11 5.38%
59. Dec 31, 2022 $71.22 -9.17% 3,839.50 -5.90%
Average (R): 0.32% 0.67%
Standard deviation: 11.11% 5.40%

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1 Data in US$ per share of common stock, adjusted for splits and stock dividends.

2 Rate of return on common stock of PYPL during period t

3 Rate of return on S&P 500 (the market portfolio proxy) during period t


Variance and Covariance

PayPal Holdings Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date RPYPL,t RS&P 500,t (RPYPL,tRPYPL)2 (RS&P 500,tRS&P 500)2 (RPYPL,tRPYPL)×(RS&P 500,tRS&P 500)
1. Feb 28, 2018 -6.93% -3.89% 52.56 20.81 33.07
2. Mar 31, 2018 -4.46% -2.69% 22.85 11.26 16.04
3. Apr 30, 2018 -1.66% 0.27% 3.93 0.16 0.78
. . . . . . .
. . . . . . .
. . . . . . .
58. Nov 30, 2022 -6.19% 5.38% 42.36 22.17 -30.65
59. Dec 31, 2022 -9.17% -5.90% 90.11 43.08 62.31
Total (Σ): 7,159.82 1,691.48 2,163.65
t Date RPYPL,t RS&P 500,t (RPYPL,tRPYPL)2 (RS&P 500,tRS&P 500)2 (RPYPL,tRPYPL)×(RS&P 500,tRS&P 500)
1. Feb 28, 2018 -6.93% -3.89% 52.56 20.81 33.07
2. Mar 31, 2018 -4.46% -2.69% 22.85 11.26 16.04
3. Apr 30, 2018 -1.66% 0.27% 3.93 0.16 0.78
4. May 31, 2018 10.00% 2.16% 93.63 2.23 14.46
5. Jun 30, 2018 1.46% 0.48% 1.30 0.03 -0.21
6. Jul 31, 2018 -1.36% 3.60% 2.82 8.62 -4.93
7. Aug 31, 2018 12.41% 3.03% 146.00 5.57 28.51
8. Sep 30, 2018 -4.86% 0.43% 26.89 0.06 1.23
9. Oct 31, 2018 -4.16% -6.94% 20.05 57.87 34.06
10. Nov 30, 2018 1.92% 1.79% 2.57 1.25 1.79
11. Dec 31, 2018 -2.00% -9.18% 5.42 96.91 22.91
12. Jan 31, 2019 5.55% 7.87% 27.36 51.87 37.67
13. Feb 28, 2019 10.49% 2.97% 103.35 5.32 23.45
14. Mar 31, 2019 5.88% 1.79% 30.92 1.27 6.26
15. Apr 30, 2019 8.60% 3.93% 68.51 10.66 27.02
16. May 31, 2019 -2.68% -6.58% 9.00 52.48 21.74
17. Jun 30, 2019 4.29% 6.89% 15.75 38.77 24.71
18. Jul 31, 2019 -3.55% 1.31% 14.97 0.42 -2.50
19. Aug 31, 2019 -1.22% -1.81% 2.39 6.13 3.83
20. Sep 30, 2019 -5.01% 1.72% 28.40 1.11 -5.60
21. Oct 31, 2019 0.49% 2.04% 0.03 1.89 0.23
22. Nov 30, 2019 3.76% 3.40% 11.79 7.50 9.40
23. Dec 31, 2019 0.15% 2.86% 0.03 4.81 -0.38
24. Jan 31, 2020 5.29% -0.16% 24.65 0.69 -4.12
25. Feb 29, 2020 -5.18% -8.41% 30.28 82.40 49.96
26. Mar 31, 2020 -11.34% -12.51% 136.10 173.67 153.75
27. Apr 30, 2020 28.47% 12.68% 792.44 144.43 338.30
28. May 31, 2020 26.02% 4.53% 660.58 14.91 99.25
29. Jun 30, 2020 12.40% 1.84% 145.84 1.37 14.16
30. Jul 31, 2020 12.54% 5.51% 149.15 23.46 59.15
31. Aug 31, 2020 4.12% 7.01% 14.39 40.19 24.05
32. Sep 30, 2020 -3.48% -3.92% 14.48 21.06 17.47
33. Oct 31, 2020 -5.53% -2.77% 34.28 11.79 20.10
34. Nov 30, 2020 15.04% 10.75% 216.54 101.77 148.45
35. Dec 31, 2020 9.38% 3.71% 82.00 9.28 27.58
36. Jan 31, 2021 0.05% -1.11% 0.08 3.17 0.49
37. Feb 28, 2021 10.90% 2.61% 111.88 3.77 20.55
38. Mar 31, 2021 -6.55% 4.24% 47.18 12.80 -24.57
39. Apr 30, 2021 8.01% 5.24% 59.09 20.94 35.17
40. May 31, 2021 -0.87% 0.55% 1.41 0.01 0.14
41. Jun 30, 2021 12.10% 2.22% 138.68 2.42 18.31
42. Jul 31, 2021 -5.47% 2.27% 33.58 2.59 -9.32
43. Aug 31, 2021 4.77% 2.90% 19.74 4.98 9.92
44. Sep 30, 2021 -9.86% -4.76% 103.60 29.42 55.20
45. Oct 31, 2021 -10.61% 6.91% 119.62 39.03 -68.33
46. Nov 30, 2021 -20.51% -0.83% 433.92 2.25 31.25
47. Dec 31, 2021 2.00% 4.36% 2.80 13.65 6.18
48. Jan 31, 2022 -8.82% -5.26% 83.66 35.11 54.19
49. Feb 28, 2022 -34.90% -3.14% 1,240.76 14.46 133.95
50. Mar 31, 2022 3.32% 3.58% 9.01 8.47 8.73
51. Apr 30, 2022 -23.97% -8.80% 590.08 89.54 229.85
52. May 31, 2022 -3.09% 0.01% 11.67 0.44 2.26
53. Jun 30, 2022 -18.04% -8.39% 337.11 82.06 166.32
54. Jul 31, 2022 23.90% 9.11% 555.77 71.32 199.09
55. Aug 31, 2022 7.99% -4.24% 58.72 24.11 -37.63
56. Sep 30, 2022 -7.89% -9.34% 67.41 100.12 82.15
57. Oct 31, 2022 -2.89% 7.99% 10.34 53.58 -23.54
58. Nov 30, 2022 -6.19% 5.38% 42.36 22.17 -30.65
59. Dec 31, 2022 -9.17% -5.90% 90.11 43.08 62.31
Total (Σ): 7,159.82 1,691.48 2,163.65

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VariancePYPL = Σ(RPYPL,tRPYPL)2 ÷ (59 – 1)
= 7,159.82 ÷ (59 – 1)
= 123.45

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (59 – 1)
= 1,691.48 ÷ (59 – 1)
= 29.16

CovariancePYPL, S&P 500 = Σ(RPYPL,tRPYPL)×(RS&P 500,tRS&P 500) ÷ (59 – 1)
= 2,163.65 ÷ (59 – 1)
= 37.30


Systematic Risk (β) Estimation

Microsoft Excel
VariancePYPL 123.45
VarianceS&P 500 29.16
CovariancePYPL, S&P 500 37.30
Correlation coefficientPYPL, S&P 5001 0.62
βPYPL2 1.28
αPYPL3 -0.53%

Calculations

1 Correlation coefficientPYPL, S&P 500
= CovariancePYPL, S&P 500 ÷ (Standard deviationPYPL × Standard deviationS&P 500)
= 37.30 ÷ (11.11% × 5.40%)
= 0.62

2 βPYPL
= CovariancePYPL, S&P 500 ÷ VarianceS&P 500
= 37.30 ÷ 29.16
= 1.28

3 αPYPL
= AveragePYPL – βPYPL × AverageS&P 500
= 0.32%1.28 × 0.67%
= -0.53%


Expected Rate of Return

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF 4.42%
Expected rate of return on market portfolio2 E(RM) 13.61%
Systematic risk (β) of PayPal Holdings Inc. common stock βPYPL 1.28
 
Expected rate of return on PayPal Holdings Inc. common stock3 E(RPYPL) 16.17%

1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).

2 See details »

3 E(RPYPL) = RF + βPYPL [E(RM) – RF]
= 4.42% + 1.28 [13.61%4.42%]
= 16.17%