Stock Analysis on Net

PayPal Holdings Inc. (NASDAQ:PYPL)

Enterprise Value to EBITDA (EV/EBITDA) 

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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

PayPal Holdings Inc., EBITDA calculation

US$ in millions

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12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net income 4,169  4,202  2,459  2,057  1,795 
Add: Income tax expense (70) 863  539  319  405 
Earnings before tax (EBT) 4,099  5,065  2,998  2,376  2,200 
Add: Interest expense 232  209  115  77 
Earnings before interest and tax (EBIT) 4,331  5,274  3,113  2,453  2,207 
Add: Depreciation and amortization 1,265  1,189  912  776  805 
Earnings before interest, tax, depreciation and amortization (EBITDA) 5,596  6,463  4,025  3,229  3,012 

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
EBITDA To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital. PayPal Holdings Inc. EBITDA increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.

Enterprise Value to EBITDA Ratio, Current

PayPal Holdings Inc., current EV/EBITDA calculation, comparison to benchmarks

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Selected Financial Data (US$ in millions)
Enterprise value (EV) 46,091 
Earnings before interest, tax, depreciation and amortization (EBITDA) 5,596 
Valuation Ratio
EV/EBITDA 8.24
Benchmarks
EV/EBITDA, Competitors1
Accenture PLC 17.52
Adobe Inc. 25.85
Automatic Data Processing Inc. 13.89
International Business Machines Corp. 13.77
Intuit Inc. 36.53
Mastercard Inc. 27.32
Microsoft Corp. 22.10
Oracle Corp. 17.74
Salesforce Inc. 33.23
ServiceNow Inc. 127.03
Visa Inc. 24.01
EV/EBITDA, Sector
Software & Services 21.18
EV/EBITDA, Industry
Information Technology 17.98

Based on: 10-K (reporting date: 2021-12-31).

1 Click competitor name to see calculations.

If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.


Enterprise Value to EBITDA Ratio, Historical

PayPal Holdings Inc., historical EV/EBITDA calculation, comparison to benchmarks

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 108,217  278,044  112,347  79,413  67,783 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 5,596  6,463  4,025  3,229  3,012 
Valuation Ratio
EV/EBITDA3 19.34 43.02 27.91 24.59 22.50
Benchmarks
EV/EBITDA, Competitors4
Accenture PLC 21.47 15.93 15.60 13.79 15.98
Adobe Inc. 35.44 43.06 41.16 37.27 36.77
Automatic Data Processing Inc. 14.05 8.32 12.32 11.88 7.32
International Business Machines Corp. 12.53 12.28 10.23 9.54 10.76
Intuit Inc. 51.96 35.70 34.27 31.25 21.97
Mastercard Inc. 31.84 38.83 32.61 28.36 24.94
Microsoft Corp. 24.59 21.74 17.21 15.67 15.00
Oracle Corp. 13.78 11.54 11.83 9.50 12.73
Salesforce Inc. 33.82 49.43 55.96 84.53 75.36
ServiceNow Inc. 147.45 220.91 187.17 260.48 1,506.85
Visa Inc. 24.81 29.80 24.56 22.59 20.10
EV/EBITDA, Sector
Software & Services 24.20 23.98 19.68 17.30 16.71
EV/EBITDA, Industry
Information Technology 20.56 20.64 15.56 13.28 13.33

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 See details »

2 See details »

3 2021 Calculation
EV/EBITDA = EV ÷ EBITDA
= 108,217 ÷ 5,596 = 19.34

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/EBITDA Enterprise value to earnings before interest, tax, depreciation and amortization is a valuation indicator for the overall company rather than common stock. PayPal Holdings Inc. EV/EBITDA ratio increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.