PayPal (NASDAQ: PYPL) is scheduled to announce Q2 earnings results on Wednesday, July 28th, after market close.
The company projects second-quarter revenues at $6.25 billion, reflecting a year-over-year improvement of 19% at the current spot rate and 17% on an FX-neutral basis. The Zacks Consensus Estimate for revenues is pegged at $6.32 billion, indicating an improvement of 20.1% from the prior-year quarter’s reported figure. PayPal expects non-GAAP earnings of $1.12 per share, suggesting a growth of 5%. The Zacks Consensus Estimate for earnings stands at $1.13 per share, suggesting growth of 5.6% from the year-ago reported figure.
Key Factors to Note:
Impacts of PayPal’s robust product portfolio, including One Touch and Venmo, are anticipated to get reflected in the second-quarter results. Strong monetization efforts of Venmo are likely to have aided its adoption rate in the to-be-reported quarter. Strengthening user engagements on the company’s platform, owing to shifting customer preference toward contactless payments amid the coronavirus pandemic, is expected to have accelerated its payment volume in the to-be-reported quarter. It is likely to have accelerated growth of the company’s net new active accounts in the second quarter. Solid momentum in P2P, courtesy of its innovative and advanced products and services, is anticipated to have driven the above-mentioned metrics. Increasing e-commerce spending during the pandemic is anticipated to have bolstered the company’s payment transactions and payment volume in the second quarter.
Key Metrics to Consider:
Total payment volume (TPV), active customer accounts, payment transactions per active account, and the total number of payment transactions are considered to be the key metrics for analyzing PayPal’s business growth. For second-quarter 2021, the Zacks Consensus Estimate for active customer accounts is pegged at 404 million, suggesting a 16.8% rise from the year-ago quarter’s reported figure. The consensus mark for payment transactions per active user is pegged at 43.2 million, suggesting a growth of 10.2% from the year-ago quarter’s reported number. The consensus estimate for the total number of payment transactions stands at 4.7 billion, indicating an improvement of 25.1% from the prior year’s quarter. The Zacks Consensus Estimate for TPV is pegged at $296.01 billion, suggesting year-over-year growth of 33.5%.
*The consensus EPS estimate is $1.12 (+4.7% Y/Y) and the consensus Revenue Estimate is $6.27B (+19.2% Y/Y).
*The company has witnessed rapid growth in online payment transactions in the last year amid the pandemic.
*PayPal’s Venmo app continues to gain traction in user engagement since it began supporting basic cryptocurrency services in April 2021, however, However, it is trailing Square’s Cash App on almost all metrics over the past year, in time spent, session count, active users, and downloads, according to the data.
*Key Metrics expectations: Total payment volume of $297.08B, active customer accounts of 12.8M, the total number of payment transactions of $4.70B, Venmo total payment volume estimate $56.09B.
PayPal Long (Buy)
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