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PayPal Holdings ROA %

: 5.86% (As of Sep. 2021)
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ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. PayPal Holdings's annualized Net Income for the quarter that ended in Sep. 2021 was $4,348 Mil. PayPal Holdings's average Total Assets over the quarter that ended in Sep. 2021 was $74,175 Mil. Therefore, PayPal Holdings's annualized ROA % for the quarter that ended in Sep. 2021 was 5.86%.

The historical rank and industry rank for PayPal Holdings's ROA % or its related term are showing as below:

NAS:PYPL' s ROA % Range Over the Past 10 Years
Min: 2.04   Med: 4.88   Max: 6.92
Current: 6.92

2.04
6.92

During the past 9 years, PayPal Holdings's highest ROA % was 6.92%. The lowest was 2.04%. And the median was 4.88%.

NAS:PYPL's ROA % is ranked higher than
85% of the 530 Companies
in the Credit Services industry.

( Industry Median: 1.79 vs. NAS:PYPL: 6.92 )

PayPal Holdings ROA % Historical Data

The historical data trend for PayPal Holdings's ROA % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

PayPal Holdings Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
ROA %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.52 4.86 4.89 5.20 6.90

PayPal Holdings Quarterly Data
Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21
ROA % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.34 9.22 6.14 6.47 5.86

Competitive Comparison

For the Credit Services subindustry, PayPal Holdings's ROA %, along with its competitors' market caps and ROA % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

PayPal Holdings ROA % Distribution

For the Credit Services industry and Financial Services sector, PayPal Holdings's ROA % distribution charts can be found below:

* The bar in red indicates where PayPal Holdings's ROA % falls into.



PayPal Holdings ROA % Calculation

PayPal Holdings's annualized ROA % for the fiscal year that ended in Dec. 2020 is calculated as:

ROA %=Net Income (A: Dec. 2020 )/( (Total Assets (A: Dec. 2019 )+Total Assets (A: Dec. 2020 ))/ count )
=4202/( (51333+70379)/ 2 )
=4202/60856
=6.90 %

PayPal Holdings's annualized ROA % for the quarter that ended in Sep. 2021 is calculated as:

ROA %=Net Income (Q: Sep. 2021 )/( (Total Assets (Q: Jun. 2021 )+Total Assets (Q: Sep. 2021 ))/ count )
=4348/( (73816+74534)/ 2 )
=4348/74175
=5.86 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data, the Net Income data used here is four times the quarterly (Sep. 2021) net income data. ROA % is displayed in the 30-year financial page.


PayPal Holdings  (NAS:PYPL) ROA % Explanation

ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A bank’s ROA % is typically well under 2%.

Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:

ROA %(Q: Sep. 2021 )
=Net Income/Total Assets
=4348/74175
=(Net Income / Revenue)*(Revenue / Total Assets)
=(4348 / 24728)*(24728 / 74175)
=Net Margin %*Asset Turnover
=17.58 %*0.3334
=5.86 %

Note: The Net Income data used here is four times the quarterly (Sep. 2021) net income data. The Revenue data used here is four times the quarterly (Sep. 2021) revenue data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).

Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.

E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.


PayPal Holdings ROA % Related Terms

Thank you for viewing the detailed overview of PayPal Holdings's ROA % provided by GuruFocus.com. Please click on the following links to see related term pages.


PayPal Holdings Business Description

PayPal Holdings logo
Industry
Financial Services » Credit Services NAICS : 522390 SIC : 7389
Address
2211 North First Street, San Jose, CA, USA, 95131
PayPal was spun off from eBay in 2015 and provides electronic payment solutions to merchants and consumers, with a focus on online transactions. The company had 377 million active accounts at the end of 2020, including 29 million merchant accounts. The company also owns Xoom, an international money transfer business, and Venmo, a person-to-person payment platform.
Executives
Karbowski Jeffrey William officer: VP, Chief Accounting Officer 2211 N 1ST ST SAN JOSE CA 95131
Schulman Daniel H director, officer: President and CEO C/O PAYPAL HOLDINGS, INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131
Moffett David M director C/O PAYPAL HOLDINGS INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131
Yeary Frank D director C/O INTEL CORPORATION 2200 MISSION COLLEGE BLVD., RN4-151 SANTA CLARA CA 95054
Auerbach Jonathan officer: EVP, Chief Strategy & Growth O C/O PAYPAL HOLDINGS, INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131
Britto Mark officer: EVP, Chief Product Officer C/O PAYPAL HOLDINGS, INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131
Alford Peggy officer: EVP, Global Sales 435 TASSO STREET PALO ALTO CA 94301
Anderson Aaron officer: VP, Chief Accounting Officer C/O PAYPAL HOLDINGS, INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131
Messemer Deborah M. director C/O ALLOGENE THERAPEUTICS, INC. 210 EAST GRAND AVENUE SOUTH SAN FRANCISCO CA 94080
Adkins Rodney C director IBM CORPORATION 294 ROUTE 100 SOMERS NY 10589
Sarnoff Ann director C/O HSN, INC. 1 HSN DRIVE SAINT PETERSBURG FL 33729
Donahoe John J director C/O PAYPAL HOLDINGS INC 2211 NORTH FIRST STREET SAN JOSE CA 95131
Dorman David W director CVS HEALTH. ONE CVS DRIVE WOONSOCKET RI 02895
Christodoro Jonathan director C/O ICAHN ENTERPRISES L.P. 16690 COLLINS AVE., PH SUNNY ISLES FL 33160
Mcgovern Gail J director ONE ENERGY PLAZA., 688WCB DETROIT MI 48226

PayPal Holdings Headlines

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