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PayPal (PYPL) Information Technology - Internet Software & Services | Reports April 27, After Market Closes

Key Takeaways

• The Estimize consensus is calling for EPS of $0.36 on revenue expectations of $2.51 billion, 1 cent higher than Wall Street on the bottom line and $8 million on top
• PayPal is going into its first Q1 earnings report after its separation from eBay in early 2015
• PayPal is firing on all cylinders and its full suite of digital payment solutions is looking to deliver another beat this quarter
• What are you expecting for PYPL? Get your estimate in here!

Digital payment platform, Paypal, is scheduled to report first quarter earnings tomorrow, after the market closes. PayPal is best known as the brainchild of famed entrepreneur Elon Musk and former subsidiary of eBay. But in fact, PayPal offers a full suite of payment solutions and is slowly surfacing as the clear winner in the rapidly growing digital payments space. Almost a year removed from eBay (EBAY), PayPal has fared much better than eBay which continues to falter. The stock is up 8.23% in the past 12 months and almost 10% year to date.

The company has also beat in its first 3 publicly reported quarters and appears on track to make it a fourth. The Estimize consensus is calling for EPS of $0.36 on revenue expectations of $2.51 billion, 1 cent higher than Wall Street on the bottom line and $8 million on top. Compared to a year earlier, profits are expected to grow 23% on a 19% increase in revenue. Given PayPal’s recent history, it is not surprising that the stock is a big mover throughout earnings season. On average the stock increases 2% through the day before earnings and can climb as high as 7% in the 5 days post earnings. 

PayPal’s suite of digital payment solutions has performed remarkably well in the past since its spinoff from eBay. PayPal is responsible for technology platforms like Venmo, Braintree and Xoom to name a few. Venmo has gained traction amongst millennial users while Braintree is being incorporated into various ecommerce platforms. Braintree was also recently integrated with FB messenger to easily send funds between Facebook friends. Meanwhile, PayPal continues to onboard new merchants with the most notable being Alibaba (BABA). PayPal is also in talks to partner with Visa, which would propel the company even further in this digital space.

On the downside, PayPal faces threats from on its credit offerings. PayPal current offers two forms of credit, PayPal Credit, formerly Bill Me Later, and Working Capital. These platforms extend a credit line to consumers and also offer cash advances to small business. Last year the company provisioned $385 million in loan losses which it expects to increase throughout fiscal 2016.