PayPal Trades at Record Levels on Strong Guidance Amid Pandemic
July 30 2020 - 1:41PM
Dow Jones News
By Maria Armental
PayPal Holdings Inc. traded at record levels a day after posting
a record performance for the second quarter, driven by a surge in
digital payments during the coronavirus pandemic that company
officials bet would be a turning point for the former eBay Inc.
subsidiary
Shares, which traded as high as $198.66, were up 4.4% at $192.68
in afternoon trade and on track for a record closing.
The net dollar value of transactions reached a record $222
billion in the quarter, the highest growth rate since PayPal's
separation from eBay in 2015. That year, PayPal's total payment
volume, as the metric is known, was about $282 billion, according
to a securities filing.
While others have reported lower cross-border volumes,
transactions where the merchant and consumer are in different
countries, PayPal said it saw a 24% rise in the quarter, driving
transaction revenue growth.
"Three months ago, the idea that our PayPal branded experiences
would enjoy TPV [total payment volume] growth for an entire quarter
at a level consistent with and
only previously seen during high-velocity holiday selling days
like Black Friday and Cyber Monday was bold and even somewhat
inconceivable, especially in the midst of a global pandemic and the
highest levels of unemployment in our lifetime," Chief Financial
Officer John D. Rainey said during a conference call with analysts,
adding that despite the prevalent uncertainty from the pandemic
"What we do know is that this is a pivotal moment in PayPal's
history.
"We believe that we've never been better positioned to realize
our ambition for greater relevance, ubiquity and impact as a global
payments leader," he said.
PayPal, citing the strong momentum for the first half of the
year and payment trends, reinstated financial projections for the
year. It now expects revenue for the year to increase about 20% and
profit on a per-share basis, to increase about 25%.
It expects to add about a net 70 million new accounts, compared
with the 37.3 million it added in 2019.
Just in the second quarter, PayPal added a net 21.3 million new
active accounts in the second quarter, ending the quarter with
about 346 million active accounts.
Canaccord Genuity analysts Joseph Vafi and Pallav Saini raised
their price target on the shares to $218 a share from $190, citing
PayPal's opportunity to capitalize on consumer shopping trends,
including the growing use of contactless payments.
PayPal is rolling out its QR code functionality in the U.S. and
is adding digital-wallet services, such as bill pay. In addition,
they said, PayPal is on track to launch a Venmo credit card this
year.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
July 30, 2020 13:26 ET (17:26 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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