Why is PayPal (PYPL) Stock Running with the Bulls?

PayPal is currently trading at $53.28 per share, up 1.46% or $0.76. The recent performance of the stock has been nothing short of remarkable. Consider that in April 2017, PayPal was struggling to break through the critical $44 per share resistance level, and it was trading sideways for most of Q1 and Q2 2017. The breakout month was May. PayPal stock spiked from $44 per share to its current level. That represents a gain of approximately 21% within six weeks. The technical indicators for PayPal are equally bullish. The 50-day moving average has risen to $49.25 per share, while the 200-day moving average continues to edge higher, and is currently at $43.02 per share. These are indeed encouraging times for binary options stock traders who are now viewing PayPal with increased optimism.

What Is Driving the Stock Price Higher?

PayPal is without doubt the world’s #1 e-commerce payments processing option. It has significant competition snapping at its heels, but it remains a dominant force in the industry. Recently, PayPal acquired a payment app that enjoys widespread usage among millennials – Venmo. This acquisition serves to expand PayPal’s sphere of influence to an ever increasing pool of customers.

The rapid rise of mobile payments options cannot be ignored by major e-commerce payments processes like PayPal. Consider that several years ago every $1 that PayPal generated in marginal revenues brought in expenses of $0.50. Fast forward to 2016: $1 in marginal revenues is only incurring additional expenses of $0.10. This points to increased efficiency of operations for PayPal, and investors are taking note.

The exponential growth in mobile payments processing is shifting the tectonic plates in e-commerce. Over the past 1 year, PayPal spent some $700 million on capital projects, while generating revenues of $3.1 billion. The $2.4 billion available to PayPal Holdings Inc could be used for any number of ambitious undertaking such as further capital expenditure, share buybacks or additional acquisitions. Traders and investors are encouraged by this surge of liquidity, since it indicates that the company is in a healthy financial position.

Should You Shy Away from Stocks Close to their 52-Week Highs?

For 2017, PayPal is trading at x 30 times earnings. While this is an overinflated figure, many folks consider it to be justified. Analysts agree that the long-term prognosis for the stock is bullish, and we see hints of that with a steadily rising 200-day MA with the stock. Presently, PayPal has a market capitalisation of $64.01 billion with a 1-year target estimate price of just $52.90. The 1-year trading range is $34 on the low end and $55.14 on the high end. That we are already closing in on the 52-week high is notable, but not something that should concern traders.

The fundamentals of the stock are structurally sound. If we consider the quarterly earnings figures since Q2 2016, PYPL is exceeding expectations. Here is a quick rundown of how the stock has performed over the last 4 financial quarters:

• Q2 2016 actual earnings and estimated earnings at $0.36
• Q3 2016 actual earnings and estimated earnings of $0.35
• Q4 2016 actual and estimated earnings at $0.42
• Q1 2017 actual earnings and estimated earnings gap (Actual $0.44 versus Estimate $0.41)
• Q2 2017 estimated earnings at $0.43 and earnings date expected on July 19 – 24, 2017

Should Binary Options Traders Be Concerned about Apple Pay?

An analyst from Pacific Crest Securities believes that PayPal investors and traders have nothing to fear when it comes to threats from Apple Pay (AAPL). Firstly, PayPal has inked deals with MasterCard (MA) and Visa (V), in addition to its recent purchase of Venmo. For 2017, PayPal stock has surged 34%, and some analysts are affixing a price target of $60 to it. PayPal is intent on boosting the user experience at checkout by offering a multitude of payments options. This will certainly be of benefit to the company, which will reflect in the stock price. In 2016, the number of people using Venmo went from 4.5 million to 9 million, and despite Apple Pay making headway, PayPal still has significant clout in the e-commerce payments arena.

The trend is your friend with PayPal. Short-term binary options call options makes sense, given the positive developments with this company.