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3 Mobile Payments Stocks Worth a Closer Look

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Zacks Thematic Screens lets you dive into 30 dynamic investment themes shaping the future. Whether you're interested in cutting-edge technology, renewable energy, or healthcare innovations, our themes help you invest in ideas that matter to you.

For those interested in viewing the Thematic lists, please click here >>> Thematic Screens – Zacks Investment Research.

Let’s take a closer look at the ‘Mobile Payments’ theme and analyze a few stocks that the screen returned, such as Discover Financial Services (DFS - Free Report) , American Express (AXP - Free Report) , and PayPal (PYPL - Free Report) .

Mobile Payments Theme

The rapid shift from cash to digital transactions, driven by a push toward convenience and security, has led to meteoric growth in mobile payments.

Mobile payments are transforming everyday transactions, whether paying for lunch, groceries, or high-end products and services.

The screen encompasses a broad spectrum of innovations, including payment infrastructure, software services, virtual wallets, and smartcards.Please click here for a direct link to the screen >>> Zacks Mobile Payments Thematic Screen

AXP to Report Quarterly Results

 

Revisions for AXP’s quarter to be reported have been bullish overall since mid-July, with the company expected to post $3.27 per share in earnings. The estimate suggests flat earnings growth year-over-year, but the overall positive revisions trend remains the highlight here. 

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Image Source: Zacks Investment Research

The company was firing on all cylinders throughout its latest period, with $16.3 billion in quarterly revenue reflecting an all-time record. And it continues to grow its customer base nicely, with new card acquisitions of 3.3 million and double-digit growth in fee revenues also reflecting notable highlights.

AXP’s top line has continued to be impressive post-pandemic, as we can see in the quarterly chart below.

Zacks Investment Research
Image Source: Zacks Investment Research

Key metrics to watch for the upcoming release include New Card Acquisitions and Fee Revenues. Shares are modestly expensive relative to historical levels heading into the print, with the current 19.4X forward 12-month earnings multiple well above the 16.1X five-year median.

Still, the current 1.4X PEG ratio reflects a somewhat fair price for the forecasted growth.

DFS Posts Strong Results

 

Concerning headline results in its recent release, DFS exceeded both consensus EPS and sales expectations easily, reflecting growth rates of 70% and 20%, respectively. The initial reaction to the results was somewhat muted, though bullish action followed on the next trading day.

DFS shares are trading at all-time highs thanks to the release, undoubtedly a bullish sign. Up nearly 40% in 2024, shares have delivered a notably strong performance relative to the S&P 500.

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Image Source: Zacks Investment Research

Modest loan growth was a tailwind for the company throughout the period, which reflects overall positivity surrounding the economic outlook. Total loans totaled $127 billion, 4% higher than the year-ago period and paired with a 10% year-over-year change in Personal Loans. The company also saw a slight credit improvement, again reflective of a positive environment.

PayPal Raises Guidance

PayPal is one of the largest online payment solutions providers, a pioneer in the space overall. The company’s outlook has improved nicely across the board, a bullish signal.

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Image Source: Zacks Investment Research

Shares have delivered an excellent bounce-back performance in 2024 after a long period of adverse price action, up 30% and benefiting in a big way from its last set of quarterly results.

The company raised its 2024 outlook and increased its share repurchases, explaining the bullish reaction post-earnings. The increased buybacks could help put in a ‘floor’ for shares, and the company has already been aggressively buying back its shares over recent years.

Zacks Investment Research
Image Source: Zacks Investment Research

The positive revisions paint a positive picture for shares in the near term, with its current valuation also supportive of gains. Shares are currently trading at a 16.9X forward 12-month earnings multiple, nowhere near the 28.5X five-year median and a fraction of 84.9X five-year highs.

The PEG ratio works out to 1.4X, again below the five-year median and five-year highs by fair margins.

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Image Source: Zacks Investment Research

Bottom Line

Zacks Thematic Screens lets you dive into 30 dynamic investment themes shaping the future. Whether you're interested in cutting-edge technology, renewable energy, or healthcare innovations, our themes help you invest in ideas that matter to you.

Upon running the Zacks Mobile Payments Thematic screen, all three stocks above – Discover Financial Services (DFS - Free Report) , American Express (AXP - Free Report) , and PayPal (PYPL - Free Report) – were returned.


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Discover Financial Services (DFS) - free report >>

American Express Company (AXP) - free report >>

PayPal Holdings, Inc. (PYPL) - free report >>

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