LONDON, UK / ACCESSWIRE / October 28, 2016 / Active Wall St. announces its post-earnings coverage on PayPal Holdings, Inc. (NASDAQ: PYPL). The company reported its financial results for the third quarter fiscal 2016 on October 20 2016. The company reported a better-than-expected 18.1% rise in revenue which came on the back of a surge in payment processing volumes and customer additions. Register with us now for your free membership at: http://www.activewallst.com/register/.
Today, AWS is promoting its earnings coverage on PYPL. Get our free coverage by signing up to http://www.activewallst.com/registration-3/?symbol=PYPL.
Earnings Reviewed
For the three months ended on September 30th, 2016, PayPal said it earned $323 million, or $0.27 per share, compared to $301 million, or $0.25 per share in the year-ago period. Adjusted for one-time items, the San Jose, California, company earned $425 million, or $0.35 per share. PayPal, spun off from e-commerce company eBay Inc. (NASDAQ: eBay) in July 2015, said revenue rose 18% to $2.67 billion from $2.26 billion a year ago. Analysts expected PayPal to report adjusted earnings of $0.35 per share on revenue of $2.65 billion.
Segment Results
During Q3 2016, PayPal processed 1.5 billion payment transactions, which translates to 30 payment transactions per active account on a trailing twelve months basis, a 13% increase from a year ago, slightly lower than the average estimate of 1.52 billion. During the quarter, PayPal announced major agreements with Visa and MasterCard. These deals allow PayPal customers to conduct transactions with those brands of cards fairly seamlessly through PayPal's system. In addition, as an extension of previous agreements with Alibaba, PayPal launched the first stages of becoming a payment option on Alibaba's global retail marketplace, AliExpress.
Gaining Market Share and Growing Mobile Payments
In Q3 2017, PayPal processed $87 billion in Total Payment Volume (TPV), representing growth of 25%, or 28% on an FX-neutral basis. Merchant Services TPV grew 32%, or 34% on an FX-neutral basis, and represented 84% of overall TPV for the quarter. PayPal processed nearly $26 billion in mobile payment volume, up 56%, representing 29% of TPV for the quarter. Payment volumes at Venmo, the company's social payments platform, soared 131% to $4.9 billion of TPV. However, PayPal's transaction margins, which have been steadily declining for the last five quarters, fell to 58.7% from 59.8% in Q2 2016.
PayPal saw its active customer accounts grow by 11%, ending the quarter with 192 million active customer accounts.
Operating Metrics
During Q3 2016, PayPal's operating margin decreased to 13.0% compared to 14.6% for the same period last year. Non-GAAP operating margin decreased to 18.4% compared to non-GAAP operating margin of 19.9% for the same period last year.
Cash Matters
PayPal generated $801 million of operating cash flow and $618 million of free cash flow during the third quarter of 2016. PayPal's cash, cash equivalents and investments totaled $6.4 billion at September 30, 2016.
Financial Guidance
For FY16, PayPal expects revenue in the range of $10.780 billion to $10.850 billion. PayPal is projecting GAAP earnings per diluted share in the range of $1.13 - $1.15 and non-GAAP earnings per diluted share in the range of $1.48 - $1.50. For Q4 2016, PayPal expects revenue to grow 14% - 17% at current spot rates and 16% - 19% on an FX-neutral basis, to a range of $2.920 billion to $2.990 billion. PayPal expects GAAP earnings per diluted share in the range of $0.30 - $0.32 and non-GAAP earnings per diluted share in the range of $0.40 - $0.42.
Stock Performance
On Thursday, the stock closed the trading session at $41.69, falling 1.51% from its previous closing price of $42.33. A total volume of 9.45 million shares have exchanged hands, which was higher than the 3-month average volume of 8.15 million shares. PayPal Holdings' stock price advanced 1.76% in the last month, 11.95% in the past three months, and 6.41% in the previous six months. Furthermore, since the start of the year, shares of the company have gained 15.17%. Shares of the company have a PE ratio of 37.69. The stock currently has a market cap of $50.32 billion.
PayPal's stock has now appreciated by 13.57% since it was spun off from eBay. It is now the larger of the two businesses with a market capitalization of over $50.32 billion compared to eBay's $32.48 billion. Its stock price rise has also eclipsed that of eBay's, rising by 10.84% since the spin-off.
Active Wall Street:
Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
\AWS has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
NO WARRANTY
AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.
CONTACT
For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:
Email: info@activewallst.com
Phone number: 1-858-257-3144
Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
SOURCE: Active Wall Street
ReleaseID: 447876
