PayPal shares under the microscope ahead of Q1 earnings call

• PayPal shares up 33% in the last six months
• $1.01 per share profit targeted
• 50 million new accounts anticipated this year
• Looking to trade the PayPal share price? Open an account today

Fintech giant PayPal (PYPL.O) is anticipating quarter one (Q1) 2021 revenues to be 28% up year-on-year (YoY), recording $5.9 billion in overall revenue. If correct, investors will secure $1.01 profit per share, which will be a 53% rise in earnings per share (EPS) compared with the same quarter in 2020.

PayPal concluded 2020 with active accounts totalling 377 million, with total payment volume (TPV) weighing in at $936 billion, thanks largely to the 73 million new accounts and the world’s continued embrace of digital transactions.

Will the bullish trend continue in 2021?

The PayPal share price has enjoyed considerable growth in the last six months, proving right the analyst forecasts that PayPal shares had plenty of upside at $199.00 last summer. It’s risen over 33% from $194.29 in November 2020 to $259.09 in May 2021. During that period, record highs were also achieved of $304.79 in February 2021, followed by a sharp retraction to $226.09 in early March.

Since then, PayPal shares have rebounded again, which is a strong indicator that Q1 2021 earnings are likely to prove encouraging for the platform. In 2020 alone, digital transactions posted an unprecedented 116% annual return, with a further 12% rise in 2021 to date.

The impact of the Covid-19 pandemic has been the perfect storm for PayPal, as consumers grew increasingly reliant on digital transactions. It’s clear that the platform remains the most trusted digital wallet, with cryptocurrency exchange Coinbase recently permitting its users to buy and sell cryptocurrencies using debit and credit cards linked to their PayPal logins.

Does the PayPal share price depend on the success of its broader product portfolio?

Through strategic acquisitions, PayPal continues to innovate the digital payments space in the tech sphere. In December 2013, PayPal acquired Venmo owner Braintree in a deal worth $800 million. The purchase enabled PayPal to reach out to millennial and generation Z consumers that prefer Venmo’s social payment app for money management.

Alongside Venmo, PayPal’s additional product portfolio is also positioning the platform well to continue its charge into 2021 and beyond. One Touch competes with Amazon’s (AMZN.O) rapid ‘buy now’ payment preferences to accelerate online transactions, while Xoom makes it possible to send funds and pay bills overseas, which has been a boon for many individuals affected by travel restrictions imposed by Covid-19.

The reinforcement of innovative and trustworthy user engagement on the PayPal platform via its added value services is one of the main reasons why its payment volumes are said to have accelerated further still in Q1 2021.

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