Hot Tech stock to watch: Paypal Holdings Inc (NASDAQ: PYPL)

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Paypal Holdings Inc (NASDAQ: PYPL) stock rose over 4.2% on 30th July, 2020 (as of 12:53 pm GMT-4 ; Source: Google finance) driven by good second quarter of 2020 performance. The firm’s Revenues rose 25% on an FX-neutral basis to $5.26 billion, driven by 20% revenue growth in April. This led to a non-GAAP operating margin rise of over 500 basis points to 28% this quarter. Non-GAAP EPS surged 49% yoy to $1.07. while reported a free cash flow of $2.2 billion in the quarter, which is an increase of 112%.

During the first half of 2020, the penetration of e-commerce as a percentage of retail sales outperformed given the demand of the products and services. The firm iZettle contactless cards integrated with both Google Pay and Samsung Pay. CVS Pharmacy is seeking to enable PayPal and Venmo QR codes for payment at their cash registers. They forecast a full national rollout to their 8,200 stand-alone store locations by the end of the year.The rollout of QR functionality would speeden Venmo monetization efforts. Venmo also had a solid second quarter with record NNAs while the active base surpassed 60 million consumers. Venmo also rose its TPV by 52% to over $37 billion. The firm is witnessing a solid rise in their Venmo usage due to ongoing pandemic.

Cross-border volumes rose 24% during the quarter, while value-added services revenue fell 26%. The transaction take rate fell to 2.23%, from 2.37%. Operating margin improved to 28.2%, which is a rise of 500 basis points on a yoy basis.  Non-GAAP EPS surged 49% to $1.07.

For the second half of 2020, the firm expects 30% volume growth as well as 25% revenue rise on a currency-neutral basis. Non-GAAP EPS is expected to grow over 25% on a spot basis in both Q3 and Q4. For the full year, the firm forecasts TPV to grow in the high 20s percentage range while revenue would rise over 22%. The firm forecasts to generate >$5 billion of free cash flow this year, which is a rise of $1 billion against earlier guidance.

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