Taking advantage of PayPal’s earnings report, let’s analyze PayPal’s latest situation and PayPal stock forecasts, especially for strong stocks like PayPal. How to buy stocks with few callbacks?
PayPal issued a financial report. After the PayPal financial report came out, it rose by more than 7%, breaking a new high.
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| PayPal's revenue |
First of all, let’s take a look at why PayPal has risen so well after the earnings report. PayPal’s earnings report is very dazzling. This earnings report is currently one of the strongest earnings reports in PayPal’s history. It has continuously refreshed the strongest earnings record. Let’s take a look at how good this financial report is. The number of new active users in the fourth quarter increased by 16 million, an increase of 72% over the same period a year ago. At present, PayPal’s total active users have reached 377 million.
The growth of active users for the whole year of 2020 is 24%. Very beautiful user growth. Active merchants have also reached 29 million. Their TPV in the fourth quarter, that is, the total payment amount is US$277 billion. The same period a year ago increased by 36%, and the fourth-quarter revenue also reached 6.12 billion, an increase of 23% over a year ago.
Not to mention cash flow, operating cash flow has increased by 46% compared to a year ago, free cash flow has increased by 50%, and profits are also exaggerated. GAAP earnings per share increased by 208%, Non-GAAP Also 29%,
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| PayPal's free cash flow |
PayPal’s profit growth is much higher than its revenue. This is a good signal. It means that the cash cow of PayPal is getting fatter. We don’t need to worry about this kind of cash flow. At the same time, the company You can develop as you like,
PayPal is very ambitious. They are setting up some big bureaus, instead of putting money in the bank waiting to be drained by the Fed. This is why PayPal spent a lot of money on business expansion in the second half of last year. Scale-up,
The first is their global installment payment business.
This business has started in the United States and the United Kingdom in the second half of 2020. This business does not charge consumers additional fees and interest and is seamlessly integrated with electronic wallets. Additional fees and credit risks, so this is a strategy to occupy the market,
This business has achieved very good results in the fourth quarter of 2020. At present, it has exceeded 750 million payments. 2.8 million consumer users and 250,000 merchants used this service in the fourth quarter.
Speaking of market share, the market share of PayPal alone has reached 54.74%. This does not include other companies under PayPal, such as Braintree, which ranks fifth in market share, and other companies such as Venmo. And software,
So if you add up all of these, it will exceed 54%. Although PayPal has a large market share, it still has not given up on expanding the market. Coupled with PayPal's continuous cash flow and profit, these big Cash cows can expand at will,
This business has achieved very good results in the fourth quarter of 2020. At present, it has exceeded 750 million payments. 2.8 million consumer users and 250,000 merchants used this service in the fourth quarter.
Speaking of market share, the market share of PayPal alone has reached 54.74%. This does not include other companies under PayPal, such as Braintree, which ranks fifth in market share, and other companies such as Venmo. And software,
So if you add up all of these, it will exceed 54%. Although PayPal has a large market share, it still has not given up on expanding the market. Coupled with PayPal's continuous cash flow and profit, these big Cash cows can expand at will,
This also involves their very successful new business in the second half of last year, that is, electronic cryptocurrency transaction services.
Since October last year, PayPal opened their cryptocurrency transaction services, which is to allow users to use PayPal to buy and sell. And holding cryptocurrencies, including Bitcoin, Ethereum, and other cryptocurrencies,
They plan to develop the cryptocurrency trading business to Venmo and other international markets in the first half of this year. This is a great strategy so that Venmo can be further realized.
Don’t underestimate PayPal’s Venmo. The total payment amount of this payment APP reached 159 billion U.S. dollars. At the same time, it has a rapid annual growth rate of 56% throughout the year. This growth rate is amazing.
Therefore, I think that it is a great strategy to develop a cryptocurrency for Venmo. Another very interesting detail is that the number of logins of users who purchased cryptocurrency with PayPal will be higher than the number of logins to PayPal before they purchased cryptocurrency. Twice as much,
PayPal has more plans for cryptocurrency in 2021. They intend to further commercialize the cryptocurrency business in 2021. PayPal plans to make cryptocurrency available for payment to 29 million PayPal merchants worldwide. The business will not charge the merchant any additional fees because the merchant will get U.S. dollars or other legal currencies in the end,
And cryptocurrencies, such as Bitcoin and Ethereum, will go directly into PayPal's pockets, do you see something? That’s right, PayPal is setting up a big game. On the surface, this operation is to allow cryptocurrencies such as Bitcoin to be used for consumption and payment, and to use Bitcoin for wider commercial applications instead of It is mostly used for pure hype and investment like now,
But in fact, PayPal may be attracting chips, that is, it wants to be a cryptocurrency dealer. This is a big game, far more than a simple "business". This may also be why ARK is very optimistic about Bitcoin For the reasons of currency and e-wallet, the layout of PayPal also corresponds well to the views of ARK in Big Ideas.
Of course, there is a big risk in cryptocurrency, which is the risk of regulations and policies, so friends who don’t understand cryptocurrency should not follow the trend blindly. You must think independently and do your homework.
The first is that PayPal in the fourth quarter allowed Venmo users to deposit cheques directly through Venmo, further grabbing the bank's business, and most of the Venmo users are young users, which also shows that the next generation of people use The trend of traditional banks will become weaker and weaker,
Second, PayPal has opened the QR code payment function in iZettle, allowing small and medium-sized enterprises in the UK to use PayPal’s QR code payment function. During the epidemic, this QR code payment function is very pleasing to consumers because it can avoid physical contact, you don’t even have to take out your credit card for others to touch,
Speaking of QR code payment, CVS pharmacies have also established PayPal and Venmo QR code payment functions in their 8,200 retail stores. At present, about 600,000 merchants have accepted PayPal and Venmo QR code payment. ,
Third, PayPal’s Xoom, a company that provides transfer services, can now directly and securely transfer funds in 12 major markets in Africa. Everyone knows that Africa is a very high-growth market, so it’s early to occupy the market in Africa. It can give better advantages in later development,
If QR code payment becomes more popular in the future, not only will there be fewer and fewer consumers using cash, but also fewer consumers who go out with credit cards. After all, credit cards and cash need to be physically carried and Touched by other people,
And contactless payment itself is the trend of future technological development, so PayPal chose to enable their QR code payment function during the epidemic for a reason. They used the epidemic to promote new payment methods for consumers.
There is also an essential message in PayPal’s financial report that the CEO said that most consumers said that after the epidemic, they would continue to spend online at the current level, which means that after the epidemic, consumers who pay online will not It will decrease, but it will be more, so online payment and e-wallet are already the future payment trend. This also includes many online services in other industries.,
There is another reason for PayPal’s soaring after the earnings report because their 2021 guidance is in line with analysts’ expectations. After all, many companies are now afraid to give guidance or give poor guidance. The stock price reaction after the financial report will be the most. On the guidelines,
PayPal's 2021 guidance is very attractive. PayPal estimates that revenue growth will reach 28% in the first quarter of 2021, and non-GAAP diluted earnings per share will increase by 50%. The annual total payment can reach a growth of more than 25%, and the annual revenue growth is 19%, and the final diluted earnings per share can reach 17%.
They plan to develop the cryptocurrency trading business to Venmo and other international markets in the first half of this year. This is a great strategy so that Venmo can be further realized.
Don’t underestimate PayPal’s Venmo. The total payment amount of this payment APP reached 159 billion U.S. dollars. At the same time, it has a rapid annual growth rate of 56% throughout the year. This growth rate is amazing.
Therefore, I think that it is a great strategy to develop a cryptocurrency for Venmo. Another very interesting detail is that the number of logins of users who purchased cryptocurrency with PayPal will be higher than the number of logins to PayPal before they purchased cryptocurrency. Twice as much,
PayPal has more plans for cryptocurrency in 2021. They intend to further commercialize the cryptocurrency business in 2021. PayPal plans to make cryptocurrency available for payment to 29 million PayPal merchants worldwide. The business will not charge the merchant any additional fees because the merchant will get U.S. dollars or other legal currencies in the end,
And cryptocurrencies, such as Bitcoin and Ethereum, will go directly into PayPal's pockets, do you see something? That’s right, PayPal is setting up a big game. On the surface, this operation is to allow cryptocurrencies such as Bitcoin to be used for consumption and payment, and to use Bitcoin for wider commercial applications instead of It is mostly used for pure hype and investment like now,
But in fact, PayPal may be attracting chips, that is, it wants to be a cryptocurrency dealer. This is a big game, far more than a simple "business". This may also be why ARK is very optimistic about Bitcoin For the reasons of currency and e-wallet, the layout of PayPal also corresponds well to the views of ARK in Big Ideas.
Of course, there is a big risk in cryptocurrency, which is the risk of regulations and policies, so friends who don’t understand cryptocurrency should not follow the trend blindly. You must think independently and do your homework.
In addition to the installment business and cryptocurrency, PayPal has some other new business strategies,
The first is that PayPal in the fourth quarter allowed Venmo users to deposit cheques directly through Venmo, further grabbing the bank's business, and most of the Venmo users are young users, which also shows that the next generation of people use The trend of traditional banks will become weaker and weaker,
Second, PayPal has opened the QR code payment function in iZettle, allowing small and medium-sized enterprises in the UK to use PayPal’s QR code payment function. During the epidemic, this QR code payment function is very pleasing to consumers because it can avoid physical contact, you don’t even have to take out your credit card for others to touch,
Speaking of QR code payment, CVS pharmacies have also established PayPal and Venmo QR code payment functions in their 8,200 retail stores. At present, about 600,000 merchants have accepted PayPal and Venmo QR code payment. ,
Third, PayPal’s Xoom, a company that provides transfer services, can now directly and securely transfer funds in 12 major markets in Africa. Everyone knows that Africa is a very high-growth market, so it’s early to occupy the market in Africa. It can give better advantages in later development,
Going back to the topic of QR code, I am very optimistic about QR code payment. China is a very successful example.
After the epidemic, many people will become accustomed to keeping distance and prioritizing the need for less physical contact. payment method,
If QR code payment becomes more popular in the future, not only will there be fewer and fewer consumers using cash, but also fewer consumers who go out with credit cards. After all, credit cards and cash need to be physically carried and Touched by other people,
And contactless payment itself is the trend of future technological development, so PayPal chose to enable their QR code payment function during the epidemic for a reason. They used the epidemic to promote new payment methods for consumers.
There is also an essential message in PayPal’s financial report that the CEO said that most consumers said that after the epidemic, they would continue to spend online at the current level, which means that after the epidemic, consumers who pay online will not It will decrease, but it will be more, so online payment and e-wallet are already the future payment trend. This also includes many online services in other industries.,
There is another reason for PayPal’s soaring after the earnings report because their 2021 guidance is in line with analysts’ expectations. After all, many companies are now afraid to give guidance or give poor guidance. The stock price reaction after the financial report will be the most. On the guidelines,
PayPal's 2021 guidance is very attractive. PayPal estimates that revenue growth will reach 28% in the first quarter of 2021, and non-GAAP diluted earnings per share will increase by 50%. The annual total payment can reach a growth of more than 25%, and the annual revenue growth is 19%, and the final diluted earnings per share can reach 17%.
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| PayPal's target eps |
The most important thing is that the actual results will be higher than these numbers.
After all, in the past 21 financial reports, PayPal has exceeded expectations 20 times. This year I think it is no exception, so PayPal will be in 2021. Results will be better than guidelines. After all, guidelines are conservative.
How can we open positions for stocks like PayPal that have not fallen very much, have not been making corrections, or making corrections? This problem may have bothered many friends, and it was also a problem that bothered me.,
Until I decided to change positions. That’s right, I bought this PayPal stock by force., I replaced part of my Facebook on PayPal before, plus the previous few callbacks I concentrated on adding positions on PayPal,
It’s normal for a good stock to become more expensive. We can’t just look at it just because a stock is expensive. We can only seize the opportunity every time it pulls back, or think that there is no PayPal as good as I did before. Exchange the stock to PayPal,
Because value investing does not buy cheap stocks, but stocks that can create more value, PayPal has given many opportunities. For example, it fell to $225 last week, so there will still be opportunities, but you should not be too greedy. ,
Especially PayPal has no unfavorable news, no political risks, no geographical risks, no antitrust risks, etc. For the time being, if this kind of stock falls sharply, most of them can only wait for the market correction or the guidance of the financial report. problem,
If there is a big correction in the market, if PayPal can pull back to the gap of $254, then I will consider increasing the position.
How can we open positions for stocks like PayPal that have not fallen very much, have not been making corrections, or making corrections? This problem may have bothered many friends, and it was also a problem that bothered me.,
Until I decided to change positions. That’s right, I bought this PayPal stock by force., I replaced part of my Facebook on PayPal before, plus the previous few callbacks I concentrated on adding positions on PayPal,
It’s normal for a good stock to become more expensive. We can’t just look at it just because a stock is expensive. We can only seize the opportunity every time it pulls back, or think that there is no PayPal as good as I did before. Exchange the stock to PayPal,
Because value investing does not buy cheap stocks, but stocks that can create more value, PayPal has given many opportunities. For example, it fell to $225 last week, so there will still be opportunities, but you should not be too greedy. ,
Especially PayPal has no unfavorable news, no political risks, no geographical risks, no antitrust risks, etc. For the time being, if this kind of stock falls sharply, most of them can only wait for the market correction or the guidance of the financial report. problem,
If there is a big correction in the market, if PayPal can pull back to the gap of $254, then I will consider increasing the position.
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| PayPal's stock price |
The above PayPal stock forecast and analysis are just my personal opinion, not investment advice. Investment is risky. You must think independently.
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