PayPal’s market capitalization exceeds that of American Express, shares up 75%

16 October 2017

PayPalAccording to the media reports, PayPal has successfully outrun American Express, as its shares have surged 75% since the year beginning, driving the company’s market capitalization to the benchmark of $83 billion. American Express has been slightly left behind with its market capitalization standing at the level of $82 billion.

As the figures show, the market capitalization of PayPal has jumped sharply since the time of the payment provider’s spin-off from eBay more than two years ago. At that moment PayPal’s market capitalization was at the mark of $47 billion. Meantime PayPal is just by $6 billion behind Morgan Stanley and by $10 billion below the market capitalization of Goldman Sachs.

Last week Morgan Stanley analysts noted that PayPal is one of the few major companies capable to deliver ‘high-teens revenue growth’, and upgraded the stock of the payment processor. In contrast, Craig Maurer from Autonomous Research expressed a wary position, underlining that rush for PayPal’s shares shows firm belief of shareholders that there is no such possibility that PayPal may fail to ‘deliver on its projections’.

While PayPal is still well behind Mastercard and Visa, its earnings multiple is higher than theirs. PayPal trades at a level of 32 times forward earnings, while Mastercard is at a level of about 29 times forward earnings and Visa is at a level of about 27 times. American Express is trailing behind with its multiple barely reaching 15 times forward earnings.

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