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April 24, 2020, 11:15 a.m. EDT

COVID-19 Is Killing Cash But Fueling Up PayPal's Cashflow

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Apr 24, 2020 (IAM Newswire via COMTEX) -- Late Wednesday, PayPal Holdings Inc. /zigman2/quotes/208054269/composite PYPL +1.68% reported fourth-quarter earnings and revenue that topped estimates but March-quarter guidance fell short of views. But let's keep the bigger picture in mind, with endless competitors and the dark times that has put the economy to the virtual standstill, this is one of the scarce few companies that is doing well during this unprecedented health crisis. And it is doing quite well!

Earnings report for the period ended December 31

PayPal earnings rose 24% compared to a year earlier to an adjusted 86 cents a share, exceeding 83 cents that analysts expected. That includes an investment gain of 2 cents a share that was disclosed in a regulatory filing on January 9.

PayPal revenue climbed 17% to $4.96 billion, also surpassing expectations of $4.94 billion.

One year ago, the result was 69 cents a share on sales of $4.23 billion. So, there is an increase of 22% on total payment volume as it reached $199.4 billion due to being boosted by e-commerce and growth at the Venmo person-to-person payment service.

Next quarter and 2020 guidance

For the quarter that ended on March 31, PayPal expects a revenue of $4.81 billion which is below analyst estimates of $4.84 billion. PayPal said it expects an adjusted profit of 77 cents whereas analysts project 82 cents. For the full-year 2020, PayPal topped estimates of $20.8 billion by forecasting revenue of $20.9 billion, including the Honey Science acquisition.

Headwinds

Its former parent, California-based eBay /zigman2/quotes/204653455/composite EBAY +2.67% is phasing out the use of PayPal for its online marketplace, starting in July as the deal expires in 2021. But bullish analysts say new partnerships with Facebook /zigman2/quotes/205064656/composite FB +2.24% , MercadoLibre /zigman2/quotes/200678442/composite MELI +1.23% , and Uber Technologies /zigman2/quotes/211348248/composite UBER -0.42% will help the digital payment processor offset the loss of eBay business. Considering Mercado Libre is about to invest $420 million in Mexico in an effort to profit from the country’s profitable online retailing market and as part of its ongoing battle with Amazon.com, Inc. /zigman2/quotes/210331248/composite AMZN +2.25% so it’s certainly good to have them as an ally!

Competitors

Despite being on top of the throne, PayPal is surrounded by endless competitors. However, the scale it has achieved is so immense that it is feared by even greatest Wall Street players.

But everyone on the digital payment front is benefiting. Bank of America /zigman2/quotes/200894270/composite BAC -0.42% is seeing increased engagement of its app during the lockdown to amortize for a very likely recession ahead. JPMorgan Chase&Co /zigman2/quotes/205971034/composite JPM -0.76% and Citigroup Inc /zigman2/quotes/207741460/composite C -0.86% are setting digital plans for the year ahead. And other than its partnership with Citigroup that was announced in November to offer the Google Cache financial account, Google /zigman2/quotes/202490156/composite GOOGL +1.69% is also benefiting from the increased downloads and engagements of all those digital payment apps. Even Square Inc /zigman2/quotes/205989440/composite SQ +2.03% , a competitor that stands to lose if PayPal gains more business users, saw staffing soar although briefly. While the economy is spiralling into the abyss, but payment processing companies are loading up record amounts of cash as Stripe has just secured funding of $600 million, pretty good for a an online-payments start-up!

Venmo, Paypal’s cash transfer app, has achieved extraordinary scale as it tackled millions of reviews in the Apple /zigman2/quotes/202934861/composite AAPL +2.75% Store, becoming the Netflix of online payments. But PayPal has something no one else has as it is the first foreign payments platform licensed to provide online payment services in China thanks to the acquisition of GoPay. And last year alone, PayPal added 37.3 million net new active users, bringing total active accounts to 305 million, up 14% year over year so it is quite nice to be in PayPal's shoes.

Digital Front - the only one that has a shot in the COVID-19 era

Big banks have no other choice but to start providing consumers with digitized options if they want to grow their revenues. And whoever is lucky enough or was smart enough to position itself on the digital front will surely be on the winning side of the COVID-19 aftermath. Nobody knows what will happen in the near future as governments are fighting this battle week per week. We're in for a recession or perhaps even a depression. But investing in digital is like planting seeds that will come to fruition in the future as Big Tech was historically always the stock investors turn to in times of downturns. And PayPal surely has its investors covered!

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

The post COVID-19 Is Killing Cash But Fueling Up PayPal's Cashflow appeared first on IAM Newswire .

COMTEX_364895978/2618/2020-04-24T11:14:50

/zigman2/quotes/208054269/composite
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$ 192.21
+3.18 +1.68%
Volume: 2.70M
Aug. 12, 2020 11:48a
P/E Ratio
88.04
Dividend Yield
N/A
Market Cap
$221.79 billion
Rev. per Employee
$710,138
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/zigman2/quotes/204653455/composite
US : U.S.: Nasdaq
$ 55.74
+1.45 +2.67%
Volume: 2.43M
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P/E Ratio
8.41
Dividend Yield
1.15%
Market Cap
$38.00 billion
Rev. per Employee
$768,143
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/zigman2/quotes/205064656/composite
US : U.S.: Nasdaq
$ 261.88
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P/E Ratio
31.95
Dividend Yield
N/A
Market Cap
$729.53 billion
Rev. per Employee
$1.57M
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/zigman2/quotes/200678442/composite
US : U.S.: Nasdaq
$ 1,113.50
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P/E Ratio
N/A
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N/A
Market Cap
$54.68 billion
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$198,875
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/zigman2/quotes/211348248/composite
US : U.S.: NYSE
$ 31.08
-0.13 -0.42%
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P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$54.70 billion
Rev. per Employee
N/A
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/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,150.00
+69.33 +2.25%
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P/E Ratio
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Dividend Yield
N/A
Market Cap
$1543.08 billion
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$359,671
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/zigman2/quotes/200894270/composite
US : U.S.: NYSE
$ 26.81
-0.11 -0.42%
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P/E Ratio
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Dividend Yield
2.67%
Market Cap
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/zigman2/quotes/205971034/composite
US : U.S.: NYSE
$ 103.03
-0.79 -0.76%
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3.48%
Market Cap
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$497,647
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/zigman2/quotes/207741460/composite
US : U.S.: NYSE
$ 53.30
-0.46 -0.86%
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P/E Ratio
9.28
Dividend Yield
3.81%
Market Cap
$111.92 billion
Rev. per Employee
$479,167
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/zigman2/quotes/202490156/composite
US : U.S.: Nasdaq
$ 1,505.54
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P/E Ratio
33.53
Dividend Yield
N/A
Market Cap
$1006.94 billion
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$1.39M
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/zigman2/quotes/205989440/composite
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$ 141.06
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P/E Ratio
235.38
Dividend Yield
N/A
Market Cap
$61.33 billion
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$984,824
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/zigman2/quotes/202934861/composite
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$ 449.53
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Aug. 12, 2020 11:48a
P/E Ratio
34.12
Dividend Yield
0.73%
Market Cap
$1870.59 billion
Rev. per Employee
$1.98M
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