Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
PayPal Holdings Inc., current price multiples
| PayPal Holdings Inc. | Accenture PLC | Adobe Inc. | Cadence Design Systems Inc. | CrowdStrike Holdings Inc. | International Business Machines Corp. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | Software & Services | Information Technology | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||
| Current share price (P) | $65.91 | |||||||||||||||||||
| No. shares of common stock outstanding | 1,115,713,968 | |||||||||||||||||||
| Growth rate (g) | 16.31% | |||||||||||||||||||
| Earnings per share (EPS) | $2.17 | |||||||||||||||||||
| Next year expected EPS | $2.52 | |||||||||||||||||||
| Operating profit per share | $3.44 | |||||||||||||||||||
| Sales per share | $24.66 | |||||||||||||||||||
| Book value per share (BVPS) | $18.17 | |||||||||||||||||||
| Valuation Ratios (Price Multiples) | ||||||||||||||||||||
| Price to earnings (P/E) | 30.40 | 24.48 | 28.89 | 76.42 | — | 43.36 | 71.66 | 40.26 | 46.31 | 701.04 | 51.54 | 40.21 | 141.11 | 32.26 | 120.91 | 63.35 | 53.08 | |||
| Price to next year expected earnings | 26.14 | 20.78 | 21.84 | 60.31 | — | 43.05 | 63.89 | 31.63 | 16.47 | 845.16 | 60.26 | 38.35 | 125.96 | 28.02 | 120.88 | 51.98 | 41.52 | |||
| Price-earnings-growth (PEG) | 1.86 | 1.37 | 0.90 | 2.86 | — | 62.03 | 5.89 | 1.47 | 0.26 | — | — | 8.31 | 11.73 | 2.13 | 4,871.11 | 2.90 | 1.91 | |||
| Price to operating profit (P/OP) | 19.17 | 18.53 | 23.83 | 59.71 | — | 27.84 | 58.49 | 32.42 | 32.60 | 1,043.86 | 194.26 | 34.58 | 147.42 | 53.85 | 153.25 | 50.22 | 45.05 | |||
| Price to sales (P/S) | 2.67 | 2.74 | 7.47 | 17.38 | 30.03 | 4.16 | 13.04 | 14.48 | 10.04 | 113.07 | 16.55 | 6.58 | 18.31 | 11.91 | 7.53 | 13.75 | 11.90 | |||
| Price to book value (P/BV) | 3.63 | 6.29 | 11.39 | 17.26 | 36.20 | 9.56 | 11.52 | 13.22 | 28.18 | 64.76 | 25.70 | 4.07 | 20.93 | 8.12 | 7.04 | 19.64 | 20.70 | |||
Based on: 10-K (reporting date: 2022-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
PayPal Holdings Inc., historical price multiples
Based on: 10-K (reporting date: 2022-12-31), 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).
- Price to Earnings (P/E) Ratio
- The price to earnings ratio exhibited an overall fluctuating trend from 2018 through 2022. Starting at 51.82 in 2018, the ratio increased steadily to a peak of 75.1 in 2020, indicating heightened market expectations or valuation relative to earnings at that time. Subsequently, there was a notable decline to 34.73 in 2021, followed by a slight increase to 37.79 in 2022. This pattern suggests a period of elevated valuation in 2020, with a normalization or correction in the following years.
- Price to Operating Profit (P/OP) Ratio
- The price to operating profit ratio showed a similar trajectory to the P/E ratio, beginning at 48.58 in 2018 and rising sharply to 95.94 in 2020. This sharp rise implies a substantial growth in stock price relative to operating profit during that year. Afterward, the ratio declined significantly to 33.98 in 2021 and further decreased to 23.82 in 2022, indicating that either operating profits increased, stock price valuation became more conservative, or both. The pronounced drop hints at improved operating profitability or a shift in market perception regarding operating profit valuation.
- Price to Sales (P/S) Ratio
- The price to sales ratio exhibited considerable volatility. It increased from 6.9 in 2018 to a high of 14.71 in 2020, highlighting a period where the market valued sales at a substantially higher multiple. However, this ratio then dropped sharply to 5.71 in 2021 and continued down to 3.32 in 2022. The steep decline after 2020 suggests either a deceleration in sales growth, a recalibration of sales valuation by the market, or both. The downward trend from 2020 onward reflects a significant lowering of valuation relative to sales.
- Price to Book Value (P/BV) Ratio
- The price to book value ratio similarly rose markedly from 6.93 in 2018 to 15.76 in 2020, representing a peak valuation relative to the company’s book value. Following this peak, the ratio declined to 6.66 in 2021 and further to 4.51 in 2022. This decline mirrors patterns seen in other valuation ratios, indicating a general reduction in market premium over the book value after 2020. It may suggest either improvements in the book value base, a moderation in market optimism, or both.
- Overall Observations
- Across all valuation ratios presented, there is a clear pattern of substantial increases peaking in 2020, followed by marked declines through 2021 and 2022. The 2020 peaks suggest a period of significant market optimism or heightened valuation multiples across earnings, operating profit, sales, and book value. The subsequent decreases point to a correction phase, where valuations reverted closer to historical or normalized levels. This trend may reflect broader market conditions, company-specific performance adjustments, or shifts in investor sentiment during and after 2020.
Price to Earnings (P/E)
PayPal Holdings Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,131,373,298 | 1,165,004,913 | 1,171,175,760 | 1,172,955,485 | 1,173,209,367 | |
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | 2,419) | 4,169) | 4,202) | 2,459) | 2,057) | |
| Earnings per share (EPS)2 | 2.14 | 3.58 | 3.59 | 2.10 | 1.75 | |
| Share price1, 3 | 80.80 | 124.30 | 269.44 | 119.89 | 90.85 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 37.79 | 34.73 | 75.10 | 57.19 | 51.82 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Accenture PLC | 22.93 | 36.58 | 28.32 | 24.58 | — | |
| Adobe Inc. | 33.15 | 48.90 | 41.69 | 57.17 | — | |
| Cadence Design Systems Inc. | 59.70 | 53.88 | 62.89 | — | — | |
| CrowdStrike Holdings Inc. | — | — | — | — | — | |
| International Business Machines Corp. | 71.56 | 19.40 | 19.30 | — | — | |
| Intuit Inc. | 57.31 | 75.17 | 49.52 | 48.17 | — | |
| Microsoft Corp. | 28.34 | 35.14 | 35.04 | 26.86 | — | |
| Oracle Corp. | 26.85 | 15.84 | 16.69 | — | — | |
| Palantir Technologies Inc. | — | — | — | — | — | |
| Palo Alto Networks Inc. | — | — | — | — | — | |
| Salesforce Inc. | 135.68 | 48.20 | 1,204.70 | — | — | |
| ServiceNow Inc. | 284.28 | 487.70 | 978.47 | — | — | |
| Synopsys Inc. | 51.76 | 73.37 | 55.92 | 39.55 | — | |
| Workday Inc. | 1,957.29 | — | — | — | — | |
| P/E Ratio, Sector | ||||||
| Software & Services | 34.39 | 37.41 | 38.26 | — | — | |
| P/E Ratio, Industry | ||||||
| Information Technology | 26.85 | 29.54 | 31.13 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= 2,419,000,000 ÷ 1,131,373,298 = 2.14
3 Closing price as at the filing date of PayPal Holdings Inc. Annual Report.
4 2022 Calculation
P/E ratio = Share price ÷ EPS
= 80.80 ÷ 2.14 = 37.79
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited significant volatility during the analyzed period. Beginning at $90.85 at the end of 2018, it increased steadily to reach a peak of $269.44 by the end of 2020. However, thereafter, the price declined sharply, falling to $124.30 by the end of 2021 and further decreasing to $80.80 by the end of 2022. This trend indicates a period of strong market confidence through 2020, followed by a substantial reduction in market value over the subsequent two years.
- Earnings per Share (EPS)
- EPS showed consistent growth from 2018 through 2020, starting at $1.75 and increasing to $3.59 by 2020. The figure stabilized in 2021 at $3.58 but declined to $2.14 in 2022. This suggests that profitability improved significantly up to 2020, remained stable in 2021, but experienced a notable decline in the most recent year, possibly reflecting operational challenges or changing market conditions.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio increased from 51.82 in 2018 to a high of 75.10 in 2020, indicating that the market was willing to pay a premium for earnings at that time, likely due to growth expectations. Subsequently, the P/E ratio dropped to 34.73 in 2021 and slightly increased to 37.79 in 2022. This downward adjustment in the ratio reflects a revaluation by the market, possibly driven by the decline in share price and EPS, suggesting more cautious investor sentiment.
Price to Operating Profit (P/OP)
PayPal Holdings Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,131,373,298 | 1,165,004,913 | 1,171,175,760 | 1,172,955,485 | 1,173,209,367 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | 3,837) | 4,262) | 3,289) | 2,719) | 2,194) | |
| Operating profit per share2 | 3.39 | 3.66 | 2.81 | 2.32 | 1.87 | |
| Share price1, 3 | 80.80 | 124.30 | 269.44 | 119.89 | 90.85 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 23.82 | 33.98 | 95.94 | 51.72 | 48.58 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Accenture PLC | 16.83 | 28.35 | 22.21 | 18.63 | — | |
| Adobe Inc. | 25.85 | 40.64 | 51.75 | 51.63 | — | |
| Cadence Design Systems Inc. | 47.21 | 48.13 | 57.54 | — | — | |
| CrowdStrike Holdings Inc. | — | — | — | — | — | |
| International Business Machines Corp. | 14.35 | 16.23 | 15.90 | — | — | |
| Intuit Inc. | 46.05 | 62.00 | 41.56 | 40.45 | — | |
| Microsoft Corp. | 24.72 | 30.79 | 29.30 | 24.54 | — | |
| Oracle Corp. | 16.51 | 14.31 | 12.17 | — | — | |
| Palantir Technologies Inc. | — | — | — | — | — | |
| Palo Alto Networks Inc. | — | — | — | — | — | |
| Salesforce Inc. | 357.52 | 431.39 | 511.08 | — | — | |
| ServiceNow Inc. | 260.26 | 436.46 | 583.07 | — | — | |
| Synopsys Inc. | 43.85 | 75.64 | 59.90 | 40.48 | — | |
| Workday Inc. | — | — | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Software & Services | 27.26 | 33.58 | 31.75 | — | — | |
| P/OP Ratio, Industry | ||||||
| Information Technology | 22.79 | 26.09 | 26.95 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 3,837,000,000 ÷ 1,131,373,298 = 3.39
3 Closing price as at the filing date of PayPal Holdings Inc. Annual Report.
4 2022 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 80.80 ÷ 3.39 = 23.82
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited notable volatility over the analyzed period. It increased substantially from $90.85 at the end of 2018 to a peak of $269.44 by the end of 2020. Subsequently, the share price declined sharply to $124.30 at the end of 2021 and further decreased to $80.80 by the end of 2022, falling below the initial 2018 level.
- Operating Profit per Share
- Operating profit per share showed a consistent upward trend from $1.87 in 2018 to $3.66 in 2021, representing steady growth in profitability on a per-share basis. There was a slight decline in 2022 to $3.39, although the level remained significantly above the 2018 figure, indicating sustained operational profitability despite recent reduction.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio followed a fluctuating pattern aligned with the share price movements and operating profit changes. The ratio increased from 48.58 in 2018 to a peak of 95.94 in 2020, reflective of a share price rise outpacing profit growth. Subsequently, the ratio decreased markedly to 33.98 in 2021 and further to 23.82 in 2022, suggesting that the market valuation normalized relative to operating profit amidst declining share prices.
Price to Sales (P/S)
PayPal Holdings Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,131,373,298 | 1,165,004,913 | 1,171,175,760 | 1,172,955,485 | 1,173,209,367 | |
| Selected Financial Data (US$) | ||||||
| Net revenues (in millions) | 27,518) | 25,371) | 21,454) | 17,772) | 15,451) | |
| Sales per share2 | 24.32 | 21.78 | 18.32 | 15.15 | 13.17 | |
| Share price1, 3 | 80.80 | 124.30 | 269.44 | 119.89 | 90.85 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 3.32 | 5.71 | 14.71 | 7.91 | 6.90 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Accenture PLC | 2.56 | 4.28 | 3.26 | 2.72 | — | |
| Adobe Inc. | 8.95 | 14.94 | 17.04 | 15.11 | — | |
| Cadence Design Systems Inc. | 14.23 | 12.55 | 13.85 | — | — | |
| CrowdStrike Holdings Inc. | 30.15 | 48.70 | 22.79 | — | — | |
| International Business Machines Corp. | 1.94 | 1.94 | 1.47 | — | — | |
| Intuit Inc. | 9.30 | 16.09 | 11.78 | 11.05 | — | |
| Microsoft Corp. | 10.40 | 12.81 | 10.85 | 8.38 | — | |
| Oracle Corp. | 4.25 | 5.38 | 4.33 | — | — | |
| Palantir Technologies Inc. | 9.34 | 15.58 | 39.86 | — | — | |
| Palo Alto Networks Inc. | 9.62 | 10.72 | 6.66 | 7.06 | — | |
| Salesforce Inc. | 7.40 | 9.24 | 8.88 | — | — | |
| ServiceNow Inc. | 12.75 | 19.02 | 25.66 | — | — | |
| Synopsys Inc. | 10.03 | 13.22 | 10.08 | 6.27 | — | |
| Workday Inc. | 11.19 | 13.95 | 10.65 | — | — | |
| P/S Ratio, Sector | ||||||
| Software & Services | 7.46 | 9.46 | 7.67 | — | — | |
| P/S Ratio, Industry | ||||||
| Information Technology | 6.02 | 6.97 | 6.11 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Sales per share = Net revenues ÷ No. shares of common stock outstanding
= 27,518,000,000 ÷ 1,131,373,298 = 24.32
3 Closing price as at the filing date of PayPal Holdings Inc. Annual Report.
4 2022 Calculation
P/S ratio = Share price ÷ Sales per share
= 80.80 ÷ 24.32 = 3.32
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited significant volatility over the period. It increased substantially from $90.85 in 2018 to a peak of $269.44 in 2020, followed by a sharp decline to $124.3 in 2021 and further down to $80.8 in 2022. This indicates a high level of market fluctuation or changing investor sentiment during these years.
- Sales per Share Trend
- Sales per share showed a steady and consistent increase throughout the period. Starting at $13.17 in 2018, it rose each year, reaching $24.32 in 2022. This reflects ongoing revenue growth on a per-share basis, suggesting improving operational performance or expanding sales volume.
- Price-to-Sales (P/S) Ratio Trend
- The P/S ratio followed a generally downward trajectory with some fluctuations. It was 6.9 in 2018, increasing to a high of 14.71 in 2020, corresponding with the peak share price. However, it dropped sharply thereafter to 5.71 in 2021 and continued declining to 3.32 in 2022. This decline in P/S ratio, despite increasing sales per share, suggests the market price did not keep pace with sales growth, possibly indicating changing valuation perceptions or market conditions.
- Overall Analysis
- The data reflect a period of rapid appreciation in market value that peaked in 2020, which was not sustained in the following years. Meanwhile, underlying sales performance consistently improved, indicating the company strengthened its business fundamentals. The declining P/S ratio in recent years suggests market reassessment of the stock's value relative to its sales, potentially signaling investor caution or shifts in industry dynamics.
Price to Book Value (P/BV)
PayPal Holdings Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,131,373,298 | 1,165,004,913 | 1,171,175,760 | 1,172,955,485 | 1,173,209,367 | |
| Selected Financial Data (US$) | ||||||
| Total PayPal stockholders’ equity (in millions) | 20,274) | 21,727) | 20,019) | 16,885) | 15,386) | |
| Book value per share (BVPS)2 | 17.92 | 18.65 | 17.09 | 14.40 | 13.11 | |
| Share price1, 3 | 80.80 | 124.30 | 269.44 | 119.89 | 90.85 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 4.51 | 6.66 | 15.76 | 8.33 | 6.93 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Accenture PLC | 7.13 | 11.06 | 8.51 | 8.15 | — | |
| Adobe Inc. | 11.22 | 15.94 | 16.53 | 16.03 | — | |
| Cadence Design Systems Inc. | 18.46 | 13.68 | 14.90 | — | — | |
| CrowdStrike Holdings Inc. | 42.67 | 48.91 | 14.78 | — | — | |
| International Business Machines Corp. | 5.34 | 5.90 | 5.24 | — | — | |
| Intuit Inc. | 7.20 | 15.71 | 17.71 | 20.00 | — | |
| Microsoft Corp. | 12.38 | 15.16 | 13.11 | 10.30 | — | |
| Oracle Corp. | — | 41.57 | 14.01 | — | — | |
| Palantir Technologies Inc. | 6.94 | 10.48 | 28.60 | — | — | |
| Palo Alto Networks Inc. | 252.00 | 71.88 | 20.61 | 12.91 | — | |
| Salesforce Inc. | 3.37 | 4.73 | 4.48 | — | — | |
| ServiceNow Inc. | 18.36 | 30.36 | 40.91 | — | — | |
| Synopsys Inc. | 9.24 | 10.50 | 7.57 | 5.16 | — | |
| Workday Inc. | 12.68 | 18.38 | 15.54 | — | — | |
| P/BV Ratio, Sector | ||||||
| Software & Services | 10.66 | 13.54 | 11.60 | — | — | |
| P/BV Ratio, Industry | ||||||
| Information Technology | 10.47 | 12.50 | 11.10 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
BVPS = Total PayPal stockholders’ equity ÷ No. shares of common stock outstanding
= 20,274,000,000 ÷ 1,131,373,298 = 17.92
3 Closing price as at the filing date of PayPal Holdings Inc. Annual Report.
4 2022 Calculation
P/BV ratio = Share price ÷ BVPS
= 80.80 ÷ 17.92 = 4.51
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited significant volatility over the observed period. From 2018 to 2020, there was a notable increase, rising from $90.85 to a peak of $269.44. This sharp appreciation more than doubled the share price within two years. However, after 2020, the share price experienced a substantial decline, falling to $124.30 in 2021 and then further down to $80.80 in 2022. This reversal represents a considerable loss in market value from its peak, ending below the initial 2019 and 2018 values.
- Book Value per Share Development
- The book value per share demonstrated a steady and moderate upward trend throughout the same timeframe. Starting at $13.11 in 2018, it consistently increased each year, reaching $18.65 in 2021 before a slight decline to $17.92 in 2022. The pattern indicates overall growth in net asset value per share, reflecting incremental improvements in equity attributable to shareholders despite minor contractions at the end of the period.
- Price-to-Book Value (P/BV) Ratio Analysis
- The P/BV ratio showed marked fluctuations, reflecting changes in both market valuation and book value. It rose from 6.93 in 2018 to peak sharply at 15.76 in 2020, indicating that market prices were increasingly above the book value per share, suggesting heightened investor expectations or market optimism. Subsequently, the ratio declined steeply, dropping to 6.66 in 2021 and further to 4.51 in 2022. This downward trend in P/BV ratio corresponds with the decrease in share price and a relatively stable book value, implying a significant reassessment of market valuation relative to the company's net assets.
- Summary Insights
- The data illustrates a period of pronounced market enthusiasm culminating in 2020, followed by a reversion to lower valuation levels by 2022. While intrinsic value, as measured by book value per share, showed steady growth, market price dynamics were more volatile and subject to correction. The decline in P/BV ratio toward the end of the period suggests that the market became less optimistic or more cautious regarding future growth prospects, leading to valuation multiples returning closer to more moderate levels relative to book value.