General Dynamics vs. PayPal: With Return Forecast Of 58%, PayPal Is A Better Bet
Last Updated: 3/16/2022
We Forecast Higher Stock Return For PayPal vs. General Dynamics
General Dynamics is trading at a cheaper P/S valuation vs. PayPal but it makes sense to pay more for PayPal for a higher return
GD and PYPL have similar operating income
3-Year Return Depends On [1] Revenue Growth [2] P/S
[1] How Much Can Revenue Grow In Next 3 Years
We forecast annual revenue growth of 8.7% for GD and 13.1% for PYPL
[2] Which P/S Scenarios Make Sense
We forecast P/S of 1.5 for GD and 5.5 for PYPL based on below plausible scenarios
Are Current P/S Ratios Justified
A higher P/S is justified by higher margin, higher revenue growth, better margin expansion, and lower risk
P/S Ratio
Revenue Growth & Operating Margin
Financial & Market Risk
Note On P/S Justification
Past Market Return Comparison vs. Benchmarks
Since 2017, General Dynamics and PayPal returned 38% and 155% respectively vs. 90% for S&P 500 and 246% for Trefis Multi-Strategy Portfolio
FAQ
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