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In this episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, take an in-depth look at the company and what investors need to know. Plus, hear Jason and Matt discuss why they're keeping an eye on Goldman Sachs (NYSE: GS) and Intuit (NASDAQ: INTU). To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center.
PayPal (NASDAQ:PYPL) stock has been a huge winner in 2020. The company has suffered only a modest negative impact from the novel coronavirus. And while the company has had to increase reserves for potential credit losses due to the virus, it's made up for that and more with a huge surge in payments activity. As a result, its shares are up an astounding 39% year-to-date. And for anyone that bought at the March lows, PayPal has soared 76% since the bottom.Source: JHVEPhoto / Shutterstock.com That said, the good news is that Paypal stock could have further to go still. That's because PayPal is one of the best-positioned companies out there for dealing with the current economic environment. With the virus still a lingering threat, who wants to be handling grimy physical cash right now? Many transactions have moved online, and PayPal is there to facilitate them.In the span of a few months, we've seen years worth of economic activity move into the digital realm -- and PayPal is right at the heart of the action. That said, it gets even better. PayPal is seeing demand soar even while the credit card companies are witnessing declining volumes for a reason we'll discuss in a moment.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOverall, PayPal is in the sweet spot, and its shareholders are reaping the benefits. Leading The Contactless Retail RevolutionPayPal should be a huge beneficiary of post-coronavirus "contactless" retail practices. While contactless retail may seem like a simple phrase, it encompasses a ton of territory. You have traditional e-commerce, curbside pickup, cashier-less checkout in stores, in-app payments and more. The good news is that many of these options put PayPal on equal footing with the credit card networks. Therefore, plastic's traditional monopoly on digital payments is breaking down. * 10 Stocks on a Bankruptcy Watch Contactless retail is hardly just a U.S. phenomenon either. In the United Kingdom -- for example -- thanks to the coronavirus, a major card company raised the limits on transaction sizes for many contactless payments. For British pound-based commerce, the limit increased from 30 pounds to 50 pounds per transaction. Following the increased limit, the average contactless transaction size has jumped nearly 50%, to 14 pounds each, and the contactless channel is earning tremendous market share, picking up nearly half of purchases within that price range.Of course, skeptics will say that this sort of uptake is happening primarily due to the crisis. And once it passes, people may return to their old ways. Some will, undoubtedly, but many won't. And once people become accustomed to the ease of contactless payments, many shoppers will stick with it forever -- thus increasing PayPal's share of the overall ecosystem. Astounding ResultsOverall, we can see this playing out in the company's most recent operating results. During April, PayPal gained 7.4 million new accounts and grew processed payments 18%. Given the sharp overall drop in economic activity, these are staggering figures. The total commerce pie shrank dramatically during April, yet PayPal managed to produce strong double-digit growth.This is in stark contrast to the major credit card companies. In fact, both Visa (NYSE:V) and Mastercard (NYSE:MA) suffered 20% or greater declines in transaction activity over the same period.This shows another advantage to PayPal, as it tends to be favored by younger and more online customers who have rising earnings power as they get older. Visa and Mastercard are undoubtedly great brands. However, some of their most profitable business is tied to established business customers who will be reining in spending for the foreseeable future.Up until this crisis, Visa and Mastercard were widely viewed as the most powerful and entrenched payments companies out there. However, as PayPal gains market share, its valuation will continue to catch up with the credit card titans. Paypal Stock VerdictSimply put, PayPal is an innovative market force that will continue to lead. The company was already producing fantastic results before the current pandemic started, and what's going on with the health crisis will be an unbelievable shot of adrenaline for the war on cash. Therefore, as long as people are being careful, PayPal will take more market share -- not only from cash, but also from credit cards.Yes, Paypal stock is rich. It is trading at 46 times forward earnings, and nearly 10 times revenues. Both of those are way up there, but it is deserving of its premium price. The company has grown its earnings at more than 30% a year compounded over the past five years, and analysts see 20% earnings per share (EPS) growth going forward. These are tremendous numbers in any environment, and especially so with the coronavirus-induced recession causing slowdowns for so many other leading companies.Even the credit card companies have been showing signs of weakness thanks to the economic situation. Yet, Visa and Mastercard routinely trade for more than 30x earnings, and were trading for as much as 20x sales prior to the March market crash.Collectively, PayPal doesn't look bad at all by comparison, so don't let its valuation scare you too much. The company's fundamentals fully support a bullish outlook right now.Eric Fry is an award-winning stock picker with numerous "10-bagger" calls -- in good markets AND bad. How? By finding potent global megatrends … before they take off. And when it comes to bear markets, you'll want to have his "blueprint" in hand before stocks go south. Eric does not own the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post Hereas How PayPal Stock Is Ringing Up Massive Gains appeared first on InvestorPlace.
The Dow Jones still remains down for the year but is showing bullish action now. Alibaba stock is moving past an early trend line entry point.
Nasdaq has a gain of 3.92% for the year Continue reading...
Warren Buffett likes 44 stocks plus two exchange-traded funds (ETFs) enough for them to be included in Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) portfolio. Of these 45 stocks, including Berkshire, I like five enough to own them in my investment portfolio. My favorite Buffett stock right now is... Mastercard (NYSE: MA).
Sentieo Data Show Google and Twitter Interest in Bitcoin Doubling So Far This Year Bitcoin and other cryptocurrencies have played a divisive role in the last few years, but recently, the interest has drawn a far wider investor base. Indeed, Paul Tudor Jones surprised Wall Street earlier this month when he revealed a significant […]
On IBD Live Tuesday, the Team discussed PayPal stock among top stocks to buy and watch.
Roku reports seeing major viewing growth for ad-supported news and entertainment content, and PayPal suggests its remittance business is hitting an inflection point.
In an era of social distancing, the digital payments giant is employing an additional tool to promote safe, in-person payments.
Read about four popular alternatives to PayPal, and learn why the online payments industry is too big for one firm to dominate completely.
PayPal Holdings, Inc. (NASDAQ: PYPL) has today rolled out the ability to use QR Codes to buy and sell goods in 28 markets around the globe. From farmers markets to selling secondhand goods - the rollout of the QR code functionality in the PayPal app allows customers to buy or sell in-person, safely and securely, and touch free.
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out […]
The S&P 500 has rallied 1.2% on May 26, topping the 3,000-mark for the first time since Mar 5.
Both retail giants shared impressive online sales and customer growth figures. But Walmart did caution that it's getting a boost from stimulus payments.
A global recession may not seem like a great time to invest in companies that help people shop, but the payments sector has been one of the few bright spots for investors amid the disruption caused by the coronavirus pandemic. Shares in Amsterdam-based Adyen have jumped 36 per cent so far this year, compared with a 20 per cent decline in the Stoxx 600 Index of major European companies. In the US, PayPal and Square have risen 33 per cent and 26 per cent respectively, whereas the S&P 500 is still down by a tenth.
PayPal discusses driving customer engagement and conversion in the new retail environment.
PayPal stock is up more than 36% year to date, scored its largest ever single-day volume May 1, and was passing another buy point on Monday.
On Tuesday's IBD Live episode, the Team analyzed the chart of PayPal stock — a leading name in the payments industry that's among the top stocks to buy and watch. The stock market uptrend paused slightly after Monday's massive rally, but stocks like PayPal still caught the IBD Live Team's attention. Today's full IBD Live show is now available for subscribers.
PayPal Holdings Inc. said Tuesday that it was doing a broad rollout of a QR code feature that will let buyers scan seller QR codes in order to pay for items in a touch-free manner using their PayPal wallets. Sellers will be able to display their codes on their phones or on a printed piece of paper. The feature is coming to 28 markets including the U.S., the U.K., France, Hong Kong, and Canada. PayPal said in a release that it is "waiving our standard seller transaction fees incurred on for sales conducted using a QR code" for a limited time due to the pressures on businesses from the COVID-19 outbreak. "Our rollout of QR codes for buyers and sellers incorporates the safety, security and convenience of using PayPal in person and enables ongoing social distancing requirements and safety preferences for in-person commerce," John Kunze, PayPal's senior vide president of branded experiences, said in the release. Chief Executive Dan Schulman told MarketWatch after PayPal's last earnings report in early May that the pandemic was going to "lead to a tremendous need for contactless payment" and that PayPal was "accelerating [its] rollout of in-store capabilities as a result of that." QR codes are a popular way to pay in China but the technology has yet to catch on in a meaningful fashion in the U.S. PayPal shares have increased 18% over the past three months as the S&P 500 has declined 13%.