Will Portfolio Strength Benefit PayPal's (PYPL) Q4 Earnings?

PayPal Holdings, Inc. PYPL is slated to report fourth-quarter 2021 results on Feb 1.

Notably, the company’s expanding services portfolio has been enabling it to maintain a deep and trusted relationship with merchants and consumers.

The Total Payment Volume (“TPV”) for the fourth quarter is anticipated to reflect the impacts of the company’s portfolio strength. Notably, TPV is a key growth metric for PayPal’s top line.

TPV in the last reported quarter improved 26% and 24% year over year on a spot rate and currency-neutral basis, respectively, to $309.9 billion. This can be attributed to well-performing Venmo, which accounted for $60 billion of TPV.

For fourth-quarter 2021, the Zacks Consensus Estimate for TPV is pegged at $344.42 billion, suggesting year-over-year growth of 24.3%.

Click here to know how the company’s overall fourth-quarter performance is likely to have been.

PayPal Holdings, Inc. Price and Consensus

PayPal Holdings, Inc. price-consensus-chart | PayPal Holdings, Inc. Quote

Portfolio Strength: A Key Catalyst

PayPal’s persistent efforts toward strengthening its services portfolio are likely to have aided the company in gaining traction across customers as well as sellers in the quarter under review.

In the fourth quarter, the company’s Honey unveiled an option called cash back through PayPal, which expanded its shopping reward offerings.

The company extended its Pay Later offerings to Wix e-commerce merchants. The merchants can now offer PayPal Pay in 4 and PayPal Credit options to customers. This is expected to have bolstered the seller base of PayPal.

The company’s strengthening cryptocurrency efforts, along with the integration with Venmo and the expanding global footprint of its cryptocurrency service, are expected to have contributed well.

The growing momentum in the buy now, pay later solution of PayPal is likely to have benefited the quarterly performance.

Apart from these, the strong monetization efforts of Venmo, robust mobile checkout services and solid momentum across merchant services are expected to have driven TPV growth in the quarter to be reported.

Zacks Rank & Stocks to Consider

Currently, PayPal carries a Zacks Rank #4 (Sell).

Some top-ranked stocks in the broader technology sector are AMETEK AME, Advanced Micro Devices AMD and Broadcom AVGO, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AMETEK has gained 17.5% over a year. The long-term earnings growth rate for AME is currently projected at 10.42%.

Advanced Micro Devices has gained 20.1% over a year. The long-term earnings growth rate for AMD is currently projected at 46.2%.

Broadcom has gained 20% over a year. The long-term earnings growth rate for AVGO is currently projected at 14.52%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.