Global payments facilitator PayPal (PYPL) announced its first quarter earnings last month, for the period ending March 31st, reporting revenue of $6.03 billion against Street estimates of $5.90 billion — growth of 31% year-on-year, notes Todd Shaver, tech sector expert and editor of The Bull Market Report.
The company also reported earnings per share of $1.22, beating analyst estimates by $0.20. Did you spot the 31% per year revenue growth? That's why we're here. PayPal has consistently grown the top line at least 20% a year and the future remains bright.
This was the strongest quarter in PayPal’s history, with a total payments value (TPV) of $285 billion and a trailing 12-month TPV reaching $1 trillion for the first time.
The company has benefitted from enormous growth in digital spending as a result of the pandemic, with 14.5 million new active accounts and 4.4 billion transactions during the quarter.
With the added momentum of the pandemic and a massive network of 26 million merchants and retailers, PayPal is perfectly positioned to take on the likes of Square (SQ) and Coinbase (COIN) with its bold entry into crypto over the past 6 months.
According to CEO Dan Schulman, cryptocurrencies will be the key growth engine for the company. The company is currently working on a "next generation" digital wallet consisting of financial, payments, cryptocurrency and shopping-related services all within one app.
With the network and reach of PayPal, it wouldn’t take long for its new services to reach critical mass, and with the right incentives, it is poised to become a dominant crypto and finance player for the digital age.
Unlike other companies that have been beneficiaries of this pandemic-induced growth, PayPal is one of the few that is perfectly positioned to sustain this growth, which reflects well in their full-year revenue and earnings targets, forecasting growth of 20% over the previous year.
PayPal had already reached our Target Price of $285, but it has fallen back a bit, giving all of us time to add to our positions.