Exploring Mobile Payments: Insights on Key Financial Players
Discover the investment themes driving the future, from technology to renewable energy and healthcare. Zacks Thematic Screens offers insights into 30 distinctive trends that can help tailor your investment strategies.
For those seeking to explore these themes, click here >>> Thematic Screens – Zacks Investment Research.
In this article, we will focus on the ‘Mobile Payments’ theme, examining stocks such as Discover Financial Services (DFS), American Express (AXP), and PayPal (PYPL).
The Growth of Mobile Payments
The transition from cash to digital transactions has accelerated due to a heightened demand for convenience and security. This shift has dramatically transformed everyday payments, whether for lunch, groceries, or luxury items.
The Mobile Payments screen covers a range of innovations, including payment infrastructure, software services, virtual wallets, and smartcards. For direct access to the screen, click here >>> Zacks Mobile Payments Thematic Screen
American Express (AXP) Prepares to Release Quarterly Results
Since mid-July, revisions for AXP’s upcoming quarterly report have been largely positive, with earnings expected to hit $3.27 per share. This estimate indicates no growth compared to the previous year, but the overall trend of positive revisions is a key takeaway.
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For the last quarter, AXP achieved record revenues of $16.3 billion, reflecting strong operational performance. The company also attracted 3.3 million new cardholders, alongside notable double-digit growth in fee revenues.
Post-pandemic, AXP’s top-line performance remains robust, as illustrated in the quarterly chart below.
Image Source: Zacks Investment Research
In anticipation of the upcoming release, key metrics include new card acquisitions and fee revenues. As AXP’s shares trade at a forward earnings multiple of 19.4X, they sit above the historical five-year median of 16.1X.
Slightly offsetting this is the current 1.4X PEG ratio, indicating a reasonably fair valuation relative to expected growth.
Discover Financial Services (DFS) Delivers Impressive Results
DFS recently reported results that exceeded expectations for both earnings and revenue, showcasing growth rates of 70% on earnings per share and 20% on sales. Although market reaction to the news was initially subdued, shares rallied sharply the following trading day.
DFS shares recently reached all-time highs, a clear indicator of positive market sentiment. So far in 2024, DFS has risen nearly 40%, outpacing the S&P 500 index.
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The company’s modest loan growth has contributed positively, with total loans reaching $127 billion—an increase of 4% year-over-year. Personal loans were particularly strong, growing by 10%. These results reflect a favorable economic climate.
PayPal (PYPL) Raises Its Outlook
As a leading online payment provider, PayPal has seen its outlook improve significantly. Recent developments signal strong investor confidence.
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This year, PayPal shares have rebounded remarkably, climbing 30% after a prolonged period of lackluster performance. The company has raised its 2024 revenue forecast and ramped up share repurchases, which might help stabilize share prices moving forward.
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Positive revisions in PayPal’s outlook suggest a promising near-term trajectory, as current shares trade at a forward earnings multiple of 16.9X, significantly below its five-year median of 28.5X. The PEG ratio, at 1.4X, also supports this optimistic outlook.
Image Source: Zacks Investment Research
Conclusion
The Zacks Thematic Screens allow investors to examine 30 influential investment themes. The Mobile Payments theme highlights companies like Discover Financial Services (DFS), American Express (AXP), and PayPal (PYPL), showcasing their significant growth potential.
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Discover Financial Services (DFS) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
