Why Paypal Holdings Inc (NASDAQ: PYPL) stock is going gangbusters today

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Paypal Holdings Inc (NASDAQ: PYPL) stock surged over 7.4% on 24th October, 2019 (as of  10:50 am GMT-4; Source: Google finance) driven by better than expected results for the third quarter of FY 19. The company’s net income has increased to $462 million in the third quarter from $436 million in the year-prior quarter. In the quarter, the company has processed more than 1 billion transactions per month for the first time. The company has added 9.8 million net new active accounts to 295 million accounts in the third quarter and that eBay volume has formed 8% of total payment volume (TPV) in the period. At the end of the third quarter of FY 19, the company has generated cash, cash equivalents, and investments of $13.2 billion and its long-term debt stands at $5 billion

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PYPL in the third quarter of FY 19 has reported the adjusted earnings per share of 61 cents, beating the analysts’ estimates for the adjusted earnings per share of 52 cents, according to the analysts surveyed by FactSet. The company had reported the adjusted revenue growth of 19 percent to $4.38 billion in the third quarter of FY 19, beating the analysts’ estimates for revenue of $4.35 billion. PYPL has increased its total payment volume (TPV) to $179 billion from $143 billion, beating the analysts’ estimates for $177.4 billion. Venmo has processed $27 billion in volume in the quarter. Total peer-to-peer volume for the whole family of PayPal products was $51 billion and formed 28% of TPV.

Meanwhile, PayPal during the quarter intended to acquire a 70% equity interest in Guofubao Information Technology Co., Ltd. (GoPay), which is a holder of a payment business license in China. After the deal commences, the company will be the first foreign company to secure a domestic payments license in China. This deal is anticipated to close in the fourth quarter of 2019 after fulfilling the customary closing conditions. Further, the company & Synchrony have signed an agreement for the expansion and extension of their strategic consumer credit relationship. As part of the agreement, Synchrony will become the exclusive issuer of a Venmo co-branded consumer credit card, which is projected to be launched in the second half of 2020.

The company narrowed its full-year 2019 revenue outlook to be in the range of $17.7 billion to $17.76 billion from a prior range of $17.6 billion to $17.8 billion. The midpoint of this new forecast is higher than the previous forecast.

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