PayPal Reports Profit Growth and Strong Forecast for 2021

PayPal rallied on the back of better-than-expected Wall Street financials for the first quarter and forecasts for the next quarter and full year. PayPal sees great opportunities for its cryptocurrency service by announcing a “next generation digital wallet.”

PayPal (PYPL) shares surged 4.7% after close of trading on Wednesday, as investors welcomed the company’s positive quarterly report and outlook.

A report from an international digital payments company could bring back positive investor sentiment and a rally in PayPal’s share price after it declined 8.7% over the past week.

PayPal shares are up 97% over the past 12 months, but growth since early 2021 is still modest at 5.6%.

Key figures

PayPal peaked in earnings in the first quarter ended March 31, posting earnings per share of $ 1.22, up 85% from last year and above the $ 1.01 analyst average.

PayPal posted net income of $ 1.10 billion for the quarter, up from $ 84 million a year earlier.

The company’s first quarter revenues grew at the fastest pace in the last two years at 31%, but were $ 9 million lower than in the fourth quarter of 2020.

PayPal’s revenue was $ 6.03 billion, which was higher than Wall Street’s estimates of $ 5.90 billion. PayPal’s quarterly revenue and earnings statistics for the last 2 years are available here.

The total volume of payments through the PayPal platform was $ 285 billion, which is 50% more than a year earlier and higher than analytical estimates of $ 265 billion.

The company added 14.5 million new active accounts, bringing its total user base at the end of the first quarter to 392 million.

Cryptocurrency business development PayPal – a new round of company development

In November 2020, the company expanded its PayPal Cryptocurrency service to all US users, allowing its users to buy, sell, and pay with cryptocurrency for a fee.

With its large user base and the creation of a network of 26 million retailers that accept payments from PayPal Cryptocurrency accounts, the company has attracted additional users and has greatly increased its activity.

Given PayPal’s big ambitions in this area, analysts see the company as a competitor to Coinbase (COIN), the most popular cryptocurrency exchange in the United States, which recently went public.

PayPal CEO Dan Shulman pointed to cryptocurrency as a key growth engine for the company. in the field of cryptocurrencies “.

PayPal previously announced plans to launch crypto settlement functionality through its Venmo “digital wallet” app and in international markets in the first half of 2021.

Commenting on the report on Wednesday, PayPal said it will release a “next-generation digital wallet” in the third quarter, which will be “a universal, personalized app that will provide more personalized and unique shopping, financial services and payments.”

PayPal Predictions

PayPal’s financial forecasts beat Wall Street’s estimates, delighting investors.

In the second quarter, PayPal expects earnings of $ 1.12 per share on revenues of $ 6.25 billion, higher than analysts’ forecasts of $ 1.10 earnings per share and $ 6.16 billion in revenue.

The company expects full-year 2021 revenues to grow 20% to $ 25.75 billion and earnings 21% to $ 4.70 per share, which also beats analyst expectations of $ 4.57 in annualized earnings per share and $ 25.71 billion. annual income.

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