Back to top

Image: Bigstock

Portfolio Strength to Benefit PayPal's (PYPL) Q1 Earnings

Read MoreHide Full Article

PayPal Holdings, Inc. (PYPL - Free Report) is slated to report first-quarter 2022 results on Apr 27.

The company’s robust services have been enabling it to maintain a deep and trusted relationship with merchants and consumers. Its two-sided platform helps in developing direct financial relationships with customers and merchants.

The Total Payment Volume (TPV) for the first quarter is anticipated to reflect the impacts of all these factors. Notably, TPV is a key growth metric for PayPal’s top line.

TPV in the last reported quarter improved 23% year over year on both spot-rate and currency-neutral basis to $339.5 billion. This was attributed to well-performing Venmo, which accounted for $60.6 billion of TPV.

For first-quarter 2022, the Zacks Consensus Estimate for TPV is pegged at $319.95 billion, suggesting growth of 12.1% on a year-over-year basis.

Click here to know how the company’s overall first-quarter performance is expected to have been.

Portfolio Strength: A Key Catalyst

PayPal’s continuous efforts toward strengthening the services portfolio are likely to have aided in gaining traction across customers in the first quarter despite the pandemic.

In the said quarter, the company rolled out the gift-wrapping feature on Venmo, which offers Venmo users eight animated gift-wrap designs that can be added to a payment note, while gifting money to friends and families.

This is likely to have aided PayPal in delivering an enhanced experience to Venmo users.

The company’s TPV is likely to have benefited from Venmo’s strengthening monetization efforts. One Touch’s growing momentum across merchants on the heels of its robust mobile checkout services is expected to have driven growth in PayPal’s mobile TPV in the first quarter.

The company’s strengthening cryptocurrency efforts, along with the integration with Venmo and the expanding global footprint of its cryptocurrency service, are expected to have contributed well.

The growing momentum in the buy now, pay later solution of PayPal is likely to have benefited the quarterly performance.

Zacks Rank & Stocks to Consider

Currently, PayPal carries a Zacks Rank #3 (Hold).

Investors interested in the broader technology sector can consider stocks like Jack Henry & Associates (JKHY - Free Report) , Broadcom (AVGO - Free Report) and Analog Devices (ADI - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Jack Henry & Associates has gained 16.3% in the past year. The long-term earnings growth rate for JKHY is currently projected at 17%.

Broadcom has gained 31.4% in the past year. AVGO’s long-term earnings growth rate is currently projected at 14.5%.

Analog Devices has gained 3.9% in the past year. The long-term earnings growth rate for ADI is currently projected at 12.3%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Published in