We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
PayPal Holdings Inc.’s (PYPL - Free Report) shares surged about 8.9% on Oct 24 after it beat on both counts in the third quarter. “PayPal’s 3Q19 results were the strongest we’ve seen in at least a year,” per an analyst. There was solid payment volume growth and expansion into China.
Quarter in Detail
PayPal Holdings delivered non-GAAP earnings of 61 cents per share in the third quarter of 2019, which surpassed the Zacks Consensus Estimate by 9 cents and rose 5.2% on a year-over-year basis.
Net revenues of $4.378 billion increased 19% from the year-ago quarter and 1.7% sequentially. Further, the figure was ahead of the Zacks Consensus Estimate of $4.341 billion. Solid performance of Venmo and One Touch drove the top line.
Guidance
For fourth-quarter 2019, PayPal expects revenues between $4.89 billion and $4.95 billion, suggesting improvement in the range of 16-17% at the current spot rate and 17-18% on FX-neutral basis. The Zacks Consensus Estimate for the top line is $4.95 billion.
Non-GAAP earnings are anticipated in the range of 81-83 cents per share. The Zacks Consensus Estimate for the bottom line is 80 cents.
For 2019, PayPal revised its revenue outlook from $17.60-$17.80 billion to $17.70-$17.76 billion. Further, the company revised the non-GAAP earnings per share outlook downward from $3.12-$3.17 to $3.06-3.08. The Zacks Consensus Estimate for earnings is pegged at $2.96.
Initiative in China
The People’s Bank of China okayed PayPal’s acquisition of a 70% stake in Shanghai-based GoPay. The start-up has digital payment licenses in China. That deal is expected to be sealed in December and will make “PayPal the first licensed foreign-payment platform to operate there.”
ETFs in Focus
This can be a winning opportunity to enter into some ETFs that are heavy on PayPal.
First Trust US IPO Index Fund (FPX - Free Report) — 5.60% exposure
The First Trust US Equity Opportunities ETF tracks the price and yield of the IPOX-100 U.S. Index. The fund comprises about 101 holdings, with PayPal occupying the highest spot. Its AUM is $1.23 billion and expense ratio is 0.59%.
The fund seeks to deliver investment results that replicate the price and yield performance, before fees and expenses, of the Indxx Global FinTech Thematic Index. The fund comprises 35 holdings, with PayPal occupying the sixth position. Its AUM is $379.4 million and expense ratio is 0.68%.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
ETFs to Ride on PayPal's Q3 Outperformance
PayPal Holdings Inc.’s (PYPL - Free Report) shares surged about 8.9% on Oct 24 after it beat on both counts in the third quarter. “PayPal’s 3Q19 results were the strongest we’ve seen in at least a year,” per an analyst. There was solid payment volume growth and expansion into China.
Quarter in Detail
PayPal Holdings delivered non-GAAP earnings of 61 cents per share in the third quarter of 2019, which surpassed the Zacks Consensus Estimate by 9 cents and rose 5.2% on a year-over-year basis.
Net revenues of $4.378 billion increased 19% from the year-ago quarter and 1.7% sequentially. Further, the figure was ahead of the Zacks Consensus Estimate of $4.341 billion. Solid performance of Venmo and One Touch drove the top line.
Guidance
For fourth-quarter 2019, PayPal expects revenues between $4.89 billion and $4.95 billion, suggesting improvement in the range of 16-17% at the current spot rate and 17-18% on FX-neutral basis. The Zacks Consensus Estimate for the top line is $4.95 billion.
Non-GAAP earnings are anticipated in the range of 81-83 cents per share. The Zacks Consensus Estimate for the bottom line is 80 cents.
For 2019, PayPal revised its revenue outlook from $17.60-$17.80 billion to $17.70-$17.76 billion. Further, the company revised the non-GAAP earnings per share outlook downward from $3.12-$3.17 to $3.06-3.08. The Zacks Consensus Estimate for earnings is pegged at $2.96.
Initiative in China
The People’s Bank of China okayed PayPal’s acquisition of a 70% stake in Shanghai-based GoPay. The start-up has digital payment licenses in China. That deal is expected to be sealed in December and will make “PayPal the first licensed foreign-payment platform to operate there.”
ETFs in Focus
This can be a winning opportunity to enter into some ETFs that are heavy on PayPal.
First Trust US IPO Index Fund (FPX - Free Report) — 5.60% exposure
The First Trust US Equity Opportunities ETF tracks the price and yield of the IPOX-100 U.S. Index. The fund comprises about 101 holdings, with PayPal occupying the highest spot. Its AUM is $1.23 billion and expense ratio is 0.59%.
Global X FinTech ETF (FINX - Free Report) — 5.26% exposure
The fund seeks to deliver investment results that replicate the price and yield performance, before fees and expenses, of the Indxx Global FinTech Thematic Index. The fund comprises 35 holdings, with PayPal occupying the sixth position. Its AUM is $379.4 million and expense ratio is 0.68%.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>