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Will Portfolio Strength Benefit PayPal's (PYPL) Q2 Earnings?

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PayPal Holdings, Inc. (PYPL - Free Report) is slated to report second-quarter 2021 results on Jul 28.

The company’s expanding services portfolio has been enabling it to maintain a deep and trusted relationship with merchants and consumers.

We believe that the Total Payment Volume (“TPV”) for the second quarter will reflect the impacts of the company’s portfolio strength. TPV is a key growth metric for PayPal’s top line.

TPV in the last reported quarter improved 50% and 46% year over year on a spot rate and a currency-neutral basis, respectively, to $285.45 billion. This can be attributed to well-performing Venmo, which accounted for $51 billion of TPV.

For second-quarter 2021, the Zacks Consensus Estimate for TPV is pegged at $296.01 billion, suggesting growth of 33.5% on a year-over-year basis.

Click here to know how the company’s overall second-quarter performance is likely to have been.

Portfolio Strength: A Key Catalyst

PayPal’s persistent efforts to strengthen its services portfolio are likely to have aided the company in gaining traction across customers as well as sellers in the quarter under review.

In the second quarter, the company unveiled a digital point-of-sale solution, PayPal Zettle, in a bid to deliver an enhanced payment experience to merchants and their customers in the United States.

PayPal acquired Happy Returns in a bid to strengthen its commerce platform. With Happy Returns, PayPal offers enhanced return experiences to retailers as well as shoppers.

The company bolstered its cryptocurrency efforts by launching crypto on Venmo, which helps Venmo customers to trade cryptocurrency seamlessly within the Venmo app.

Growing momentum across Checkout with Crypto feature is likely to have been a major positive.

The impacts of all these endeavors are expected to get reflected in the company’s second-quarter results.

Apart from these, strong monetization efforts of Venmo and robust mobile checkout services alongwith One Touch’s solid momentum are expected to have driven TPV growth in the quarter under review.

Zacks Rank & Other Stocks to Consider

Currently, PayPal carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector are KLA Corporation (KLAC - Free Report) , Amphenol Corporation (APH - Free Report) and Garmin Ltd. (GRMN - Free Report) . All three companies currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rates of KLA, Amphenol and Garmin are pegged at 14.03%, 12.02% and 6.8%, respectively.

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