A Promising Stock
Read management/analysts’ comments on PayPal’s Q1 report
While PayPal has dominated the payment processing market in recent years, competition is growing and it faces the risk of losing market share to peers like Square, Inc. (NYSE: SQ). However, the company’s extensive network of merchants and customers gives it an edge.
Crypto Push
The management looks to enhance customer engagement by bringing more innovation to the digital wallet and merchant e-commerce platform. The cryptocurrency trading service, which allows clients to buy and sell Bitcoin, should help PayPal boost transaction volumes going forward. In a move aimed at ramping its crypto prowess, the company recently acquired Curv, a provider of digital asset security technology. Meanwhile, there are unconfirmed reports that PayPal is mulling the launch of its own stablecoin.
For the full year 2021 based on our record first-quarter performance and sustained momentum, we are raising our net new active TPV revenue and earnings outlook. Relative to our prior expectations eBay’s managed payments transition has accelerated and we now expect a greater percentage of the migration to be complete by the end of the third quarter. This acceleration puts more near-term pressure on our revenue and earnings growth. At the same time, this more compressed timing allows for a cleaner exit in 2021. Broad-based strength in our Merchant Services business and improving credit performance allows us to more than offset this impact.
Dan Schulman, chief executive officer of PayPal
Record Quarter
The company has maintained stable growth over the years, delivering financial performance that mostly topped expectations. Net profit climbed to $1.22 per share in the March quarter as payment volumes grew sharply. There was a 31% surge in revenues to about $6 billion. It had 392 million active customers at the end of the quarter. The results, which also benefited from the government’s stimulus, exceeded the market’s projection. It was the best quarter in terms of financial performance, which prompted the management to raise the full-year outlook.
Square fourth quarter 2020 earnings call transcript
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