PayPal (NASDAQ:PYPL – Get Free Report) and Expensify (NASDAQ:EXFY – Get Free Report) are both business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.
Volatility & Risk
PayPal has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, Expensify has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500.
Profitability
This table compares PayPal and Expensify’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PayPal | 15.77% | 25.42% | 6.41% |
| Expensify | -15.05% | -16.00% | -11.42% |
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PayPal | $33.17 billion | 1.37 | $5.23 billion | $5.41 | 9.32 |
| Expensify | $142.10 million | 0.70 | -$21.39 million | ($0.24) | -4.67 |
PayPal has higher revenue and earnings than Expensify. Expensify 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
68.3% of PayPal shares are held by institutional investors. Comparatively, 68.4% of Expensify shares are held by institutional investors. 0.6% of PayPal shares are held by insiders. Comparatively, 11.7% of Expensify shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and target prices for PayPal and Expensify, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PayPal | 5 | 33 | 7 | 0 | 2.04 |
| Expensify | 1 | 1 | 1 | 0 | 2.00 |
PayPal presently has a consensus target price of $56.55, suggesting a potential upside of 12.12%. Expensify has a consensus target price of $3.50, suggesting a potential upside of 212.50%. Given Expensify’s higher probable upside, analysts plainly believe Expensify is more favorable than PayPal.
Summary
PayPal beats Expensify on 10 of the 14 factors compared between the two stocks.
About PayPal
PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It operates a two-sided network at scale that connects merchants and consumers that enables its customers to connect, transact, and send and receive payments through online and in person, as well as transfer and withdraw funds using various funding sources, such as bank accounts, PayPal or Venmo account balance, PayPal and Venmo branded credit products comprising its installment products, credit and debit cards, and cryptocurrencies, as well as other stored value products, including gift cards and eligible rewards. The company provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company was founded in 1998 and is headquartered in San Jose, California.
About Expensify
Expensify, Inc. provides a cloud-based expense management software platform to individuals and corporations, small and midsized businesses, and enterprises in the United States and internationally. The company’s platform enables users to manage corporate cards, pay bills, generate invoices, collect payments, and book travel. It also offers track and submit plans for individuals. The company was founded in 2008 and is based in Portland, Oregon.
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