PayPal (NASDAQ:PYPL) & American Well (NYSE:AMWL) Critical Contrast

PayPal (NASDAQ:PYPL) and American Well (NYSE:AMWL) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Valuation and Earnings

This table compares PayPal and American Well’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PayPal $21.45 billion 15.29 $4.20 billion $2.64 105.72
American Well $245.26 million 10.11 -$224.43 million ($2.27) -4.50

PayPal has higher revenue and earnings than American Well. American Well is trading at a lower price-to-earnings ratio than PayPal, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

79.1% of PayPal shares are owned by institutional investors. Comparatively, 40.8% of American Well shares are owned by institutional investors. 0.1% of PayPal shares are owned by company insiders. Comparatively, 14.7% of American Well shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for PayPal and American Well, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PayPal 0 4 32 0 2.89
American Well 0 7 6 0 2.46

PayPal currently has a consensus target price of $319.35, suggesting a potential upside of 14.42%. American Well has a consensus target price of $23.25, suggesting a potential upside of 127.72%. Given American Well’s higher probable upside, analysts clearly believe American Well is more favorable than PayPal.

Profitability

This table compares PayPal and American Well’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PayPal 20.42% 20.07% 5.61%
American Well -79.09% -15.41% -14.11%

Summary

PayPal beats American Well on 10 of the 12 factors compared between the two stocks.

PayPal Company Profile

PayPal Holdings, Inc. engages in the development of technology platform for digital payments. Its solutions include PayPal, PayPal Credit, Braintree, Venmo, Xoom, and Paydiant products. The firm manages a two-sided proprietary global technology platform that links customers, which consist of both merchants and consumers, to facilitate the processing of payment transactions. It allows its customers to use their account for both purchase and paying for goods, as well as to transfer and withdraw funds. The firm also enables consumers to exchange funds with merchants using funding sources, which include bank account, PayPal account balance, PayPal Credit account, credit and debit card or other stored value products. It offers consumers person-to-person payment solutions through its PayPal Website and mobile application, Venmo and Xoom. The company was founded in December 1998 and is headquartered in San Jose, CA.

American Well Company Profile

American Well Corporation operates as a telehealth company that enables digital delivery of care for healthcare. Its application offers urgent care; pediatrics; therapy; menopause nutrition; menopause counseling; telestroke; population health management; telepsychiatry; pregnancy and postpartum care; pregnancy and postpartum therapy; breastfeed support; and menopause care. The company also provides telemedicine equipment, including telemedicine carts, peripherals, TV kits, tablets, and kiosks. American Well Corporation was incorporated in 2006 and is headquartered in Boston, Massachusetts.

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