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Mobile Payment & Alliances to Fuel PayPal (PAPL) Q4 Earnings
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PayPal Holdings, Inc. (PYPL - Free Report) is slated to release fourth-quarter 2017 results on Jan 31. The question lingering in investors’ minds is whether this online payment solution provider will be able to post a positive earnings surprise in the to-be-reported quarter. Notably, over the trailing four quarters, the company surpassed the Zacks Consensus Estimate thrice and posted in-line results in the other occasion. It has an average positive earnings surprise of 5.4%. So, let’s see how things are shaping up prior to this announcement.
What to Expect?
The current Zacks Consensus Estimate for the quarter under review is pegged at 52 cents, representing remarkable year-over-year growth of 23.8%. We note that the Zacks Consensus Estimate remained nearly unchanged over the past 60 days. Additionally, analysts polled by Zacks project revenues of roughly $3.63 billion, up 21.8% from the year-ago quarter.
What the Zacks Model Unveils?
Our proven model conclusively shows that PayPal is likely to beat earnings estimates this quarter. Per our model, a stock with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold), has higher chance of beating estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. PayPal currently carries a Zacks Rank #3 and has an ESP of +0.11%. You can see the complete list of today’s Zacks #1 Rank stocks here.
PayPal’s growth depends on two major metrics – Active Customer Accounts and Total Payment Volume – and the company has been witnessing massive growth in both the metrics for the past several quarters. The trend is likely to continue in the to-be-reported quarter as well.
According to our latest consensus estimates, PayPal’s active customer accounts will reach to 225 million in the quarter, marking a year-over-year improvement of 14.2%. Similarly, total payment volume is anticipated to surge 30.4% year over year to $129.6 billion.
The upswing will mainly be driven by several partnerships and strong adoption of the company’s mobile payment solutions.
PayPal continues to ride on partnerships. The company’s ongoing strategic partnership with Visa (V - Free Report) provides enhanced consumer choice, point of sale acceptance, instant money withdrawal facility and data quality. Similarly, PayPal and Mastercard have been working together for 10 years. The firms currently run a multi-year PayPal Extras Mastercard co-branded consumer credit card program. MasterCard is a "clear and equal" payment choice in PayPal’s wallet.
The company’s partnerships with Alphabet (GOOGL - Free Report) , Facebook , Alibaba and eBay are also helping it add new customers and increase payment volume. Over the past year, the company has placed itself at a potential position for partnerships across multiple original equipment manufacturers (OEM), technology companies, mobile-carriers, retailers and financial institutions. All these are likely to aid the company’s fourth-quarter results.
Furthermore, PayPal’s mobile payment tools — One Touch and Venmo — are other key growth catalysts. One Touch allows customers to make purchases through a variety of merchant websites or apps without having to enter additional information. At the end of the prior quarter, the service was in use by more than 6 million merchants and 70 million consumers.
The company’s other platform — Venmo — enables users to transfer money between family and friends via mobile devices. Venmo users can pay at more than 2 million PayPal merchants across the United States. In the third quarter, Venmo generated $9.4 billion of payment volume, marking impressive year-over-year growth of 93%.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Mobile Payment & Alliances to Fuel PayPal (PAPL) Q4 Earnings
PayPal Holdings, Inc. (PYPL - Free Report) is slated to release fourth-quarter 2017 results on Jan 31. The question lingering in investors’ minds is whether this online payment solution provider will be able to post a positive earnings surprise in the to-be-reported quarter. Notably, over the trailing four quarters, the company surpassed the Zacks Consensus Estimate thrice and posted in-line results in the other occasion. It has an average positive earnings surprise of 5.4%. So, let’s see how things are shaping up prior to this announcement.
What to Expect?
The current Zacks Consensus Estimate for the quarter under review is pegged at 52 cents, representing remarkable year-over-year growth of 23.8%. We note that the Zacks Consensus Estimate remained nearly unchanged over the past 60 days. Additionally, analysts polled by Zacks project revenues of roughly $3.63 billion, up 21.8% from the year-ago quarter.
What the Zacks Model Unveils?
Our proven model conclusively shows that PayPal is likely to beat earnings estimates this quarter. Per our model, a stock with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold), has higher chance of beating estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. PayPal currently carries a Zacks Rank #3 and has an ESP of +0.11%. You can see the complete list of today’s Zacks #1 Rank stocks here.
PayPal Holdings, Inc. Price and EPS Surprise
PayPal Holdings, Inc. Price and EPS Surprise | PayPal Holdings, Inc. Quote
What’s Driving the Better-than-Expected Earnings?
PayPal’s growth depends on two major metrics – Active Customer Accounts and Total Payment Volume – and the company has been witnessing massive growth in both the metrics for the past several quarters. The trend is likely to continue in the to-be-reported quarter as well.
According to our latest consensus estimates, PayPal’s active customer accounts will reach to 225 million in the quarter, marking a year-over-year improvement of 14.2%. Similarly, total payment volume is anticipated to surge 30.4% year over year to $129.6 billion.
The upswing will mainly be driven by several partnerships and strong adoption of the company’s mobile payment solutions.
PayPal continues to ride on partnerships. The company’s ongoing strategic partnership with Visa (V - Free Report) provides enhanced consumer choice, point of sale acceptance, instant money withdrawal facility and data quality. Similarly, PayPal and Mastercard have been working together for 10 years. The firms currently run a multi-year PayPal Extras Mastercard co-branded consumer credit card program. MasterCard is a "clear and equal" payment choice in PayPal’s wallet.
The company’s partnerships with Alphabet (GOOGL - Free Report) , Facebook , Alibaba and eBay are also helping it add new customers and increase payment volume. Over the past year, the company has placed itself at a potential position for partnerships across multiple original equipment manufacturers (OEM), technology companies, mobile-carriers, retailers and financial institutions. All these are likely to aid the company’s fourth-quarter results.
Furthermore, PayPal’s mobile payment tools — One Touch and Venmo — are other key growth catalysts. One Touch allows customers to make purchases through a variety of merchant websites or apps without having to enter additional information. At the end of the prior quarter, the service was in use by more than 6 million merchants and 70 million consumers.
The company’s other platform — Venmo — enables users to transfer money between family and friends via mobile devices. Venmo users can pay at more than 2 million PayPal merchants across the United States. In the third quarter, Venmo generated $9.4 billion of payment volume, marking impressive year-over-year growth of 93%.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>