In terms of market share, Paypal began the COVID-19 pandemic with more than 50% of the market share in global digital payments and that figure increased in its wake. The company’s platforms allow consumers to send and receive payments in over 200 countries and in approximately 50 currencies, not including cryptocurrencies which the platform supports as well. Members can connect their accounts to a bank and withdraw to it or use a PayPal-branded debit card to access funds. Balances can also be carried on a short or long-term basis but the company does not pay interest. PayPal reported a robust Q3 with 9% revenue growth and a 20% increase in non-GAAP earnings per share, exceeding guidance. The company witnessed a decline in active accounts by 2.8 million, part of a strategic churn of low-quality accounts.
- So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
- In essence, a stablecoin can be thought of as a tokenized version of a fiat currency—in the case of PYUSD, that is the dollar.
- The company topped consensus revenue estimates three times over this period.
- The digital payments behemoth saw its stock tank amid soaring inflation, rising interest rates, and a softer economic environment.
Non-GAAP EPS for the full year is expected to grow by 21% to $4.98, and free cash flow is projected to be at least $4.6 billion. The earnings call highlighted strategic priorities for 2024, including a return to growth in customer base and efficient expense management. PayPal’s (PYPL 1.09%) stock price rose 4% during after-hours trading on Nov. 1 after the digital payments leader posted its third-quarter report.
PayPal is exploring a stock-trading platform for U.S. customers
Hence, PayPal is competing against established rivals that already command a large chunk of the market. While this represents an extreme example, it also reinforces the fact that stablecoins remain a nascent market, as does the cryptocurrency space overall. Nonetheless, with backing by cash and U.S. government-guaranteed Treasurys, the backing for PYUSD is as sound as one could hope for. With a U.S.-regulated company issuing the tokens, and PayPal trading publicly on the Nasdaq stock exchange since 2002, proponents will argue that the stablecoin is both reputable and trustworthy. The dollar-denominated PYUSD is the first stablecoin launched by a major U.S. financial company. Treasurys and other cash equivalents and should be able to be redeemed one-for-one in U.S. dollars.
However, eBay (EBAY 1.53%) acquired the company a few months later for $1.5 billion in stock. PayPal investors received 0.39 shares of eBay for each PayPal share they held. With a forward price-to-earnings (P/E) ratio https://traderoom.info/ of less than 17 times in late 2023, PayPal traded at a relatively low valuation. The S&P 500 traded at about 20 times its forward P/E, and the Nasdaq Composite Index was even higher at almost 28 times its forward P/E.
Main factors of price return
The company operates as a payment processor for online vendors, auction sites and many other commercial users, for which it charges a fee. There is no fee for using PayPal to pay for a transaction if you use a PayPal balance or your linked bank account and the payment is in your home currency. There is no fee if you send cash to a friend or relative rather than a business, again in your home currency. There’s no fee for transferring money to and from PayPal and your bank account.
Knowing the full range of possible stock intrinsic values gives a complete picture of the investment risks and opportunities. The true value lies somewhere between the worst case and best case scenarios. We take the average of these two methods to estimate the intrinsic value as accurately as possible.
Block Stock Gains on Upbeat Calls. There Are ‘Growth Opportunities’ Ahead.
It was on track to increase its non-GAAP (generally accepted accounting principles) earnings per share by 21% in 2023. Instead of actively buying shares of PayPal directly, you can also passively invest in the financial technology company through a fund holding its shares. Exchange-traded funds (ETFs) are an easy pivot point trading strategies way to gain exposure to PayPal stock. Shortly after the Paypal’s IPO, it was acquired by eBay in July of 2002 for roughly $1.5 billion and valued at $23 a share. PayPal indicated it was because eBay and PayPal wanted to be two stand-alone companies in order to capitalize on their individual growth opportunities.
Investors are now considering what to do with this top fintech as we enter the new year. The Securities and Exchange Commission said last week it is stepping up its inquiry into «gamification» and how brokerages use technology to interact with their customers. The agency mentioned behavioral prompts used by online brokerages and investment advisors that may encourage investors to trade more stocks and other securities and take on more risks. As of January 15th, there was short interest totaling 19,550,000 shares, a drop of 15.4% from the December 31st total of 23,110,000 shares. Based on an average daily volume of 17,400,000 shares, the short-interest ratio is currently 1.1 days.
Meanwhile, SEC Chairman Gary Gensler has indicated that his agency is considering imposing a ban on payment for order flow (PFOF), which is the main source of revenue for Robinhood and many of its competitors. PFOF allows these brokerages to eliminate visible commissions on trades, which they employ as a key marketing tool. PayPal Holdings Inc.’s story will be all about margins when the payment-technology company posts results after the close of Wednesday’s trading. As PayPal’s growth cooled off, it focused on stabilizing its operating margins, keeping its free cash flow (FCF) positive, and boosting its earnings per share (EPS) with buybacks. If PayPal did look to get full approval as a brokerage firm alone, it would need to complete a new membership process through the industry’s main regulator, FINRA.
Where can I buy PayPal stock?
In 2023, PayPal expected to repurchase about $5 billion of its shares. Crypto wallets act as a digital storage solution for users to hold and manage their cryptocurrencies. Check out at millions of online stores and crypto marketplaces, track market fluctuations in the app, or transfer your crypto into your PayPal Balance account3 or to a friend— all in just a few steps. The change in revenue and net margin are two other factors that can impact a company’s market cap. An increase in revenue indicates that the company is generating more sales, while an improvement in net margin indicates that the company is becoming more efficient and generating more profit from each dollar of sales.
With a 50% growth in the PayPal stock price since the beginning of the 2017, the company is already occupying a large portion of the electronic industry and it doesn’t look like they will be slowing down any time soon. As of Sept. 30, PayPal counted 432 million total active accounts, including 397 million individuals and 35 million merchants. This represents a 20% increase from the 361 million active accounts the business had just two years ago. Furthermore, the PayPal network processed a whopping $337 billion in total payment volume in the third quarter, with the average account transacting 50.1 times over the trailing 12-month period. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.
From 2009 to 2016, PayPal operated Student Accounts, allowing parents to set up a student account, transfer money into it, and obtain a debit card for student use. The program provided tools to teach how to spend money wisely and take responsibility for actions.[121][122] PayPal discontinued Student Accounts in August 2016. Crypto, short for cryptocurrency, is a form of currency that only exists in the digital space. Complete your W-9 tax form in advance in the app to use your crypto as a payment method. There’s a reason the adage goes “underpromise and over deliver” and not the other way round.
Cryptocurrency and stock trading are seen as ways to keep consumers engaged on these payment platforms. In early 2006, PayPal introduced an optional security key as an additional precaution against fraud.[189] A user account tied to a security key has a modified login process. For convenience, users may append the code generated by the hardware key to their password in the login screen. This method is required for some services, such as when using PayPal through the eBay application on iPhone.