PayPal raises forecast on back of positive quarter
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PayPal raises forecast on back of positive quarter

Global electronic payment provider PayPal has raised its guidance on the back on a positive second quarter that beat analysts’ expectations. The company saw a rise in both users and payment volumes over the three months, and as a result, increased its full year earnings forecast to a range of $1.80 per share to $1.84 per share. Previously, it had been $1.74 per share to $1.79 per share. It also raised its full year revenue prediction from $12.72 billion to a range between $12.78 billion and $12.88 billion. The company’s share price rose by more than 3% in after-hours trading as a result.

PayPal’s share price has appreciated by 48% year to date

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SOURCE: Yahoo Finance

PayPal reported earnings per share of $0.46 against consensus estimates of $0.43, and revenue of $3.14 billion against analysts’ expectations of $3.09 billion for the quarter. CEO Dan Schulman unveiled a number of new partnerships, which the company has been pursuing eagerly since spinning off from eBay in 2015. Amongst them was a deal with Chinese internet heavyweight Baidu. He also highlighted improvements the company was making in user experience, saying:

“Finding faster and more convenient ways for our customers to fund into and out of their PayPal accounts is a key part of our overall value proposition.”

Schulman went on to detail what he thinks lies behind PayPal’s incredible growth. It is worth noting that the company’s market cap is now almost twice that of its former owner eBay – and many observers put this down to Schulman’s capable hands at the wheel. He said:

“Our performance is driven by the cumulative effect of multiple incidents. We have fundamentally retooled our technology and infrastructure, leading to significant improvements and availability and develop our productivity. We have meaningfully improved our core experiences and expanded our suite of products. Our overall scale is accelerating due to the network effects of our two-sided platform. It is clearly a macro secular shift toward digital payments and our customer choice results continue to exceed our expectations.”

Disclosure

Dominion holds PayPal in its Global Trends Managed Fund.


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