PayPal Holdings (NASDAQ: PYPL) and Mimecast Limited (NASDAQ:MIME) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitabiliy.

Earnings and Valuation

This table compares PayPal Holdings and Mimecast Limited’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PayPal Holdings $11.76 billion 6.02 $2.26 billion $1.25 47.09
Mimecast Limited $186.56 million 8.44 $2.15 million ($0.10) -279.27

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

Insider & Institutional Ownership

81.3% of PayPal Holdings shares are owned by institutional investors. Comparatively, 48.0% of Mimecast Limited shares are owned by institutional investors. 6.0% of PayPal Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for PayPal Holdings and Mimecast Limited, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PayPal Holdings 0 9 29 1 2.79
Mimecast Limited 0 1 12 0 2.92

PayPal Holdings presently has a consensus target price of $60.21, indicating a potential upside of 2.29%. Mimecast Limited has a consensus target price of $28.91, indicating a potential upside of 3.51%. Given Mimecast Limited’s stronger consensus rating and higher probable upside, analysts plainly believe Mimecast Limited is more favorable than PayPal Holdings.

Profitability

This table compares PayPal Holdings and Mimecast Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PayPal Holdings 12.82% 11.10% 4.87%
Mimecast Limited -2.92% -6.82% -2.90%

Risk and Volatility

PayPal Holdings has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, Mimecast Limited has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Summary

PayPal Holdings beats Mimecast Limited on 11 of the 14 factors compared between the two stocks.

About PayPal Holdings

PayPal Holdings, Inc. is a technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants. The Company’s combined payment solutions, including its PayPal, PayPal Credit, Braintree, Venmo, Xoom and Paydiant products, compose its Payments Platform. It operates a two-sided global technology platform that links its customers, both merchants and consumers, around the globe to facilitate the processing of payment transactions, allowing it to connect merchants and consumers. It allows its customers to use their account for both purchase and paying for goods, as well as to transfer and withdraw funds. It 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.

About Mimecast Limited

Mimecast Limited is a provider of cloud security and risk management services for corporate information and e-mail. The Company’s suite of cloud services protects customers from the business and data security risks. It also mitigates the business disruption that e-mail failure or downtime causes. In addition, its archiving services secure, store and manage critical corporate communications and information to address the compliance and e-discovery requirements. It has developed its cloud architecture to offer customers e-mail security, continuity and archiving capabilities in a single service. It has developed an operating system (OS) called Mime OS for native cloud services. It protects inbound and outbound e-mail from malware, spam, threats, e-mail denial of service (DoS) and distributed denial of service (DDoS), data leaks and other security threats. It also offers service bundles, and Mimecast mobile and desktop applications.

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