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Portfolio Strength to Benefit PayPal's (PYPL) Q3 Earnings

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PayPal Holdings, Inc. (PYPL - Free Report) is slated to report third-quarter 2021 results on Nov 11.

The company’s robust services have been enabling it to maintain a deep and trusted relationship with merchants and consumers. Its two-sided platform helps in developing direct financial relationships with customers and merchants.

The Total Payment Volume (TPV) for the third quarter is anticipated to reflect the impacts of all the factors. Notably, TPV is a key growth metric for PayPal’s top line.

TPV in the last reported quarter improved 40% and 36% year over year on a spot-rate and currency-neutral basis, respectively, to $310.9 billion. This was attributed to well-performing Venmo, which accounted for $58 billion of TPV.

For third-quarter 2021, the Zacks Consensus Estimate for TPV is pegged at $314.7 billion, suggesting growth of 27.6% on a year-over-year basis.

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

Portfolio Strength: A Key Catalyst

PayPal’s continuous efforts toward strengthening the services portfolio are likely to have aided the company in gaining traction across customers in the third quarter despite the pandemic.

In the third quarter, the company rolled out 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 also unveiled its cryptocurrency service, which allows users to buy, hold and sell digital currencies directly from their PayPal account, in the U.K.

Additionally, the company made its Pay in 4service — a buy now, pay later solution — available to eligible customers in Australia.

These endeavors are likely to have aided PayPal’s performance in the quarter under review.

Apart from these, the company’s third-quarter results are expected to reflect strength in product lines, including Venmo and One Touch.

The company’s TPV is expected to have benefited from Venmo’s growing monetization efforts. Further, One Touch’s growing momentum across merchants on the heels of its robust mobile checkout services is expected to have driven growth in PayPal’s mobile TPV in the third quarter.

Zacks Rank & Stocks to Consider

Currently, PayPal carries a Zacks Rank #3 (Hold).

Other better-ranked stocks in the broader technology sector include Advanced Micro Devices (AMD - Free Report) , PerkinElmer (PKI - Free Report) and Mimecast Limited (MIME - Free Report) . While Advanced Micro Devices sports a Zacks Rank #1 (Strong Buy), PerkinElmer and Mimecast carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for Advanced Micro Devices, PerkinElmer, and Mimecast are currently projected at 46.2%, 41.7%, and 35%, respectively.