PayPal Holdings, Inc. PYPL is slated to report first-quarter 2024 results on Apr 30.
The company’s portfolio strength has been helping it maintain a deep and trusted relationship with merchants and consumers. Its two-sided platform helps develop direct financial relationships with customers and merchants.
Increasing user engagements on PayPal’s platform, owing to a continuous shift in customer preference toward contactless payments, have been acting as a tailwind.
Strong monetization efforts of Venmo are likely to have aided its adoption rate in the to-be-reported quarter. It is likely to have driven growth in the Total Payments Volume (TPV) of the company. 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.
PYPL’s strengthening cryptocurrency efforts, along with the integration with Venmo and the expanding global footprint of its cryptocurrency service, are expected to have aided.
The growing momentum of the company’s buy now pay later (“BNPL”) solution is anticipated to have driven its quarterly performance.
Advancing PayPal’s Checkout experiences are expected to have sustained the company’s momentum in the to-be-reported quarter.
However, factors like intensifying competition in the digital payment market, macro headwinds that are hurting consumer spending, and tough comparisons with large volumes of digital payments during the pandemic are expected to have been major concerns for PayPal’s active accounts number.
PayPal Holdings, Inc. Price and EPS Surprise
PayPal Holdings, Inc. price-eps-surprise | PayPal Holdings, Inc. Quote
Key Metrics to Consider
For the first quarter, the Zacks Consensus Estimate for active customer accounts is pegged at 427 million, suggesting a 1.4% fall from the year-ago quarter’s reported figure.
The consensus estimate for the total number of payment transactions is pegged at 6.5 billion, indicating an improvement of 11.3% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for TPV is pegged at $394.05 billion, suggesting growth of 11.2% on a year-over-year basis.
The consensus mark for transaction revenues stands at $6.8 billion, implying growth of 6.8% from the year-ago actual.
The Zacks Consensus Estimate for other value-added services revenues is pegged at $711 million, indicating growth of 5.2% on a year-over-year basis.
Guidance & Estimate Trend
For first-quarter 2024, PayPal expects revenue growth of 6.5% on a spot-rate basis and 7% on a currency-neutral basis from the year-ago quarter. The Zacks Consensus Estimate for revenues is pegged at $7.50 billion, indicating an improvement of 6.6% from the prior-year quarter’s reported figure.
PayPal expects non-GAAP earnings to rise in the mid-single digits on a year-over-year basis. The Zacks Consensus Estimate for earnings is pegged at $1.20 per share, indicating growth of 2.6% from the year-ago reported figure.
What Our Model Says
Our proven model predicts an earnings beat for PayPal this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
PayPal has a Zacks Rank #3 and an Earnings ESP of +3.78%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are some other companies worth considering from the same space, as our model shows that these also have the right combination of elements to beat on earnings in the soon-to-be-reported quarterly results.
APi Group APG has an Earnings ESP of +2.06% and a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
APi Group is scheduled to release first-quarter 2024 results on May 2. The Zacks Consensus Estimate for APG’s earnings is pegged at 32 cents per share, indicating growth of 28% from the year-ago quarter’s reported figure.
Arista Networks ANET has an Earnings ESP of +2.49% and a Zacks Rank #1 at present.
ANET is set to report its first-quarter 2024 results on May 7. The Zacks Consensus Estimate for ANET’s earnings is pegged at $1.74 per share, indicating growth of 21.7% from the year-ago quarter’s reported figure.
Cardinal Health CAH has an Earnings ESP of +1.11% and a Zacks Rank #3 at present.
CAH is scheduled to release third-quarter fiscal 2024 results on May 2. The Zacks Consensus Estimate for CAH’s earnings is pegged at $1.95 per share, indicating growth of 12.1% from the year-ago quarter’s reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
