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Headquartered in San Jose, CA, PayPal Holdings (PYPL - Free Report) is a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide. The company was spun-off from eBay in 2015.
They facilitate customers to pay and get paid, withdraw funds from their bank accounts and hold balances in their PayPal accounts in various currencies.
They also provide ways for businesses to accept payments from merchant websites, mobile devices and applications, and at offline retail locations through a wide range of payment solutions. Their payments platforms include PayPal, PayPal Credit, Venmo and Braintree products.
Impressive Results
The company reported excellent Q3 2017 results, beating the Zacks Consensus Estimates on both the top and bottom lines. The management also raised the guidance for the year.
Adjusted earnings of 46 cents per share were ahead of our consensus by 2 cents and up 31.4% year over year. Net revenue of $3.24 billion also beat the Zacks Consensus Estimate by $66 million and was up 21.4% on a year-over-year basis. It was also ahead of the company’s own guidance.
"PayPal delivered one of its strongest quarters since becoming an independent company. Putting our customers first in everything we do, enhancing our suite of products and services, and partnering with some of the world's most popular brands are delivering tangible results," said the CEO. “As the world rapidly accelerates to digital payments, we have a tremendous opportunity in front of us."
Rising Earnings Estimates
Analysts have raised their estimates for the company after excellent earnings. Zacks Consensus Estimates for the current and next fiscal year have increased to $1.85 per share and $2.25 per share from $1.84 and $2.20, before the results.
The company has never missed estimates, as you can see from the beautiful chart below:
Rise in online shopping and digital payments bode well for digital payment platform providers like PayPal. During the quarter, total payment volume increased 30% year-over-year to $114 billion while mobile payment volume surged 54% to $40 billion.
Venmo, the company's social payments platform, processed approximately $9 billion of total payment volume, up 93% year-over-year. The company announced that more than two million retailers, would allow their customers to pay for things using the platform.
Last week, the company also announced a new deal with Facebook (FB) which allows Facebook messenger users to send money to one another via PayPal. Facebook users could already pay for their shopping on messenger via their PayPal accounts.
The Bottom Line
Shares of PayPal are not cheap. They are up about 71% this year and currently trade at a forward earnings multiple of 37.66, resulting in a Style Score of “F” for Value. But considering company’s excellent growth potential (expected EPS growth of 17.22%) and leading position in digital payments space, the stock is still worth buying.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Bull of the Day: PayPal (PYPL)
Headquartered in San Jose, CA, PayPal Holdings (PYPL - Free Report) is a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide. The company was spun-off from eBay in 2015.
They facilitate customers to pay and get paid, withdraw funds from their bank accounts and hold balances in their PayPal accounts in various currencies.
They also provide ways for businesses to accept payments from merchant websites, mobile devices and applications, and at offline retail locations through a wide range of payment solutions. Their payments platforms include PayPal, PayPal Credit, Venmo and Braintree products.
Impressive Results
The company reported excellent Q3 2017 results, beating the Zacks Consensus Estimates on both the top and bottom lines. The management also raised the guidance for the year.
Adjusted earnings of 46 cents per share were ahead of our consensus by 2 cents and up 31.4% year over year. Net revenue of $3.24 billion also beat the Zacks Consensus Estimate by $66 million and was up 21.4% on a year-over-year basis. It was also ahead of the company’s own guidance.
"PayPal delivered one of its strongest quarters since becoming an independent company. Putting our customers first in everything we do, enhancing our suite of products and services, and partnering with some of the world's most popular brands are delivering tangible results," said the CEO. “As the world rapidly accelerates to digital payments, we have a tremendous opportunity in front of us."
Rising Earnings Estimates
Analysts have raised their estimates for the company after excellent earnings. Zacks Consensus Estimates for the current and next fiscal year have increased to $1.85 per share and $2.25 per share from $1.84 and $2.20, before the results.
The company has never missed estimates, as you can see from the beautiful chart below:
PayPal Holdings, Inc. Price and Consensus
PayPal Holdings, Inc. Price and Consensus | PayPal Holdings, Inc. Quote
Strong Growth in Digital Payments
Rise in online shopping and digital payments bode well for digital payment platform providers like PayPal. During the quarter, total payment volume increased 30% year-over-year to $114 billion while mobile payment volume surged 54% to $40 billion.
Venmo, the company's social payments platform, processed approximately $9 billion of total payment volume, up 93% year-over-year. The company announced that more than two million retailers, would allow their customers to pay for things using the platform.
Last week, the company also announced a new deal with Facebook (FB) which allows Facebook messenger users to send money to one another via PayPal. Facebook users could already pay for their shopping on messenger via their PayPal accounts.
The Bottom Line
Shares of PayPal are not cheap. They are up about 71% this year and currently trade at a forward earnings multiple of 37.66, resulting in a Style Score of “F” for Value. But considering company’s excellent growth potential (expected EPS growth of 17.22%) and leading position in digital payments space, the stock is still worth buying.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>