OLO (NYSE:OLO) and PayPal (NASDAQ:PYPL) Financial Review

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for OLO and PayPal, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OLO	0	1	3	0	2.75
PayPal	0	17	19	1	2.57

OLO presently has a consensus price target of $8.67, indicating a potential upside of 65.08%. PayPal has a consensus price target of $75.56, indicating a potential upside of 4.32%. Given OLO’s stronger consensus rating and higher probable upside, equities analysts clearly believe OLO is more favorable than PayPal.

Valuation & Earnings

This table compares OLO and PayPal’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OLO	$228.29 million	3.73	-$58.29 million	($0.29)	-18.10
PayPal	$29.77 billion	2.49	$4.25 billion	$3.97	18.24

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

Insider & Institutional Ownership

93.4% of OLO shares are held by institutional investors. Comparatively, 68.3% of PayPal shares are held by institutional investors. 39.3% of OLO shares are held by company insiders. Comparatively, 0.1% of PayPal shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OLO	-9.36%	-0.47%	-0.42%
PayPal	14.30%	22.82%	5.75%

Risk & Volatility

OLO has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, PayPal has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500.

Summary

PayPal beats OLO on 10 of the 15 factors compared between the two stocks.

About OLO

Olo Inc. operates an open SaaS platform for restaurants in the United States. The company's platform enables on-demand digital commerce operations, which cover digital ordering, delivery, front-of-house management, and payments. Its solutions include Order, a suite of solutions powering restaurant brands' on-demand commerce operations, enabling digital ordering, delivery, and channel management through ordering, dispatch, rails, switchboard, network, virtual brands, kiosk, catering, and sync modules; Engage, a suite of restaurant-centric marketing solutions optimizing guest lifetime value by strengthening and enhancing the restaurants' direct guest relationships, through the guest data platform, marketing, sentiment, and host modules; and Pay, a frictionless payment platform that enables restaurants to grow and protect their digital business through customer payment experience that offers advanced fraud prevention to improve authorization rates for valid transactions, and increase basket conversion through its Olo Pay module. The company was formerly known as Mobo Systems, Inc. and changed its name to Olo Inc. in January 2020. Olo Inc. was incorporated in 2005 and is headquartered in New York, New York.

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.