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PayPal (PYPL) to Report Q1 Earnings: What's in the Offing?
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PayPal Holdings, Inc. (PYPL - Free Report) is scheduled to report first-quarter 2020 results on May 6.
For the first quarter, the company has trimmed revenue guidance on account of the coronavirus outbreak. The company now anticipates COVID-19 pandemic to reduce year-over-year revenue growth by one percentage point on both a spot and foreign currency-neutral basis in the quarter under review.
Moreover, revenues in the first quarter are anticipated to be near the lower-end of the guided range of $4.78-$4.84 billion. The Zacks Consensus Estimate for revenues is pegged at $4.72 billion, suggesting growth of 14.4% from the year-ago quarter.
Meanwhile, the guidance for first quarter non-GAAP earnings remains unchanged at 76-78 cents per share. The Zacks Consensus Estimate for earnings stands at 76 cents per share, indicating a decline of 2.7% from the prior-year reported figure.
Notably, the company surpassed the Zacks Consensus Estimate in the trailing four quarters. It has a trailing four-quarter positive earnings surprise of 13%, on average.
PayPal’s expanding product portfolio is expected to have benefited its performance in the to-be-reported quarter.
In the first quarter, the company completed the buyout of Honey Science, an online coupon startup. The company amasses valuable data on consumer buying habits and offers coupons for online bargains.
This acquisition is likely to have expanded PayPal’s presence in the e-commerce market during the quarter under review. Moreover, the deal might have helped the company expand globally and accelerate development of new products.
Further, the company inked a deal with UnionPay International (UPI) in the first quarter, in an attempt to support UPI acceptance across its own global acceptance regions. This is likely to have helped PayPal in delivering enhanced payment experience to customers. This, in turn, is expected to get reflected in the PayPal’s first-quarter results.
The acquisition of GoPay is also expected to have aided PayPal in strengthening presence in the digital payment service market of China in the to-be-reported quarter.
Apart from these, Venmo’s improving monetization efforts may have bolstered its adoption rate and driven total active accounts in the first quarter.
Further, robust mobile checkout services of One Touch are expected to have contributed to the company’s total payment volume (TPV) growth.
However, coronavirus related uncertainties and disruptions are likely to get reflected in the company’s first-quarter results.
Upswing in Key Metrics
TPV, active customer accounts, payment transactions per active account and total number of payment transactions are considered to be the key metrics for analyzing PayPal’s business growth.
For the first quarter, the Zacks Consensus Estimate for active customer accounts is pegged at 311 million, up 12.3% from the year-ago reported figure.
Further, the consensus mark for payment transactions per active user is pegged at 41.5 million, suggesting growth of 9.5% year over year. Moreover, the consensus estimates for total number of payment transactions stands at 3.5 billion, indicating an improvement of 22.7% from the prior-year quarter.
Furthermore, the Zacks Consensus Estimate for TPV is pegged at $197.2 billion, suggesting growth of 22.1% on a year-over-year basis.
However, declining eBay volume is likely to have remained a headwind for the company’s TPV. Further, rising competitive pressure from Square (SQ - Free Report) , Amazon (AMZN - Free Report) and Alphabet’s (GOOGL - Free Report) Google might have weighed on the first-quarter performance.
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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PayPal (PYPL) to Report Q1 Earnings: What's in the Offing?
PayPal Holdings, Inc. (PYPL - Free Report) is scheduled to report first-quarter 2020 results on May 6.
For the first quarter, the company has trimmed revenue guidance on account of the coronavirus outbreak. The company now anticipates COVID-19 pandemic to reduce year-over-year revenue growth by one percentage point on both a spot and foreign currency-neutral basis in the quarter under review.
Moreover, revenues in the first quarter are anticipated to be near the lower-end of the guided range of $4.78-$4.84 billion. The Zacks Consensus Estimate for revenues is pegged at $4.72 billion, suggesting growth of 14.4% from the year-ago quarter.
Meanwhile, the guidance for first quarter non-GAAP earnings remains unchanged at 76-78 cents per share. The Zacks Consensus Estimate for earnings stands at 76 cents per share, indicating a decline of 2.7% from the prior-year reported figure.
Notably, the company surpassed the Zacks Consensus Estimate in the trailing four quarters. It has a trailing four-quarter positive earnings surprise of 13%, on average.
PayPal Holdings, Inc. Price and EPS Surprise
PayPal Holdings, Inc. price-eps-surprise | PayPal Holdings, Inc. Quote
Factors to Note
PayPal’s expanding product portfolio is expected to have benefited its performance in the to-be-reported quarter.
In the first quarter, the company completed the buyout of Honey Science, an online coupon startup. The company amasses valuable data on consumer buying habits and offers coupons for online bargains.
This acquisition is likely to have expanded PayPal’s presence in the e-commerce market during the quarter under review. Moreover, the deal might have helped the company expand globally and accelerate development of new products.
Further, the company inked a deal with UnionPay International (UPI) in the first quarter, in an attempt to support UPI acceptance across its own global acceptance regions. This is likely to have helped PayPal in delivering enhanced payment experience to customers. This, in turn, is expected to get reflected in the PayPal’s first-quarter results.
The acquisition of GoPay is also expected to have aided PayPal in strengthening presence in the digital payment service market of China in the to-be-reported quarter.
Apart from these, Venmo’s improving monetization efforts may have bolstered its adoption rate and driven total active accounts in the first quarter.
Further, robust mobile checkout services of One Touch are expected to have contributed to the company’s total payment volume (TPV) growth.
However, coronavirus related uncertainties and disruptions are likely to get reflected in the company’s first-quarter results.
Upswing in Key Metrics
TPV, active customer accounts, payment transactions per active account and total number of payment transactions are considered to be the key metrics for analyzing PayPal’s business growth.
For the first quarter, the Zacks Consensus Estimate for active customer accounts is pegged at 311 million, up 12.3% from the year-ago reported figure.
Further, the consensus mark for payment transactions per active user is pegged at 41.5 million, suggesting growth of 9.5% year over year. Moreover, the consensus estimates for total number of payment transactions stands at 3.5 billion, indicating an improvement of 22.7% from the prior-year quarter.
Furthermore, the Zacks Consensus Estimate for TPV is pegged at $197.2 billion, suggesting growth of 22.1% on a year-over-year basis.
However, declining eBay volume is likely to have remained a headwind for the company’s TPV. Further, rising competitive pressure from Square (SQ - Free Report) , Amazon (AMZN - Free Report) and Alphabet’s (GOOGL - Free Report) Google might have weighed on the first-quarter performance.
Currently, PayPal carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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