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Also, PYPL’s 48.43% and 0.35% respective trailing-12-month gross profit margin and asset turnover ratio are lower than the 49.04% and 0.65% industry averages. The stock is also currently trading at an expensive valuation. In terms of forward EV/S ratio, PYPL’s 13.07x is 210% higher than the 4.22x industry average. In addition, the stock’s 13.09x forward P/S is 215.3% higher than the 4.15x industry average. So, it could be wise to wait for a better entry point in the stock.
However, rapid technological innovations and the recovering economy are driving the growth of the credit services sector. Also, the Federal Reserve could raise interest rates as early as 2023 and recently indicated its willingness to reduce asset purchases before the end of the year, which should help credit services companies generate better interest income.
