PayPal Will Continue To Profit From A Huge Increase In Volume And Accounts

#PayPal will continue to profit from a huge increase in volume and accounts. And there are a couple of new headwinds, thanks to its efforts in China and with cryptocurrency, that should push PayPal even higher.

PayPal Stock at a Glance

The first thing to know about PayPal is its amazing growth. In its most recent earnings report, PayPal disclosed that it is profiting from a huge increase in volume and accounts. It says it added more than 15 million new accounts were added in the third quarter, bringing the company’s total to more than 360 million.

Total payment volume for the quarter was up 38% on a year-over-year basis. And the company’s Venmo product, which specializes in customer-to-customer money transfers, saw a 61% increase and $44 billion in transactions during the quarter.

A lot of this was brought about by Covid-19 – when the pandemic took hold, people decided that handling physical money wasn’t such a good idea and they turned to digital payment platforms.

Third-quarter earnings were strong, with revenue of $5.46 billion and earnings per share of $1.07. Both of those beat analysts’ expectations of $5.42 billion and EPS of 94 cents.

PayPal is expected to release its next earnings report in early February. The company has guided earnings growth to slow to 17% to 18% because of what it calls an acceleration of “incremental investment” in the fourth quarter. However, full-year EPS is expected to be 27% to 28%.

PayPal closed up 7.460 at 247.250. Volume was 14% below average (neutral) and Bollinger Bands were 41% narrower than normal.

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the bullish or bearish trend reflected in the lower ribbon.

Summary

PayPal is currently 35.6% above its 200-period moving average and is in an upward trend.

Volatility is relatively normal as compared to the average volatility over the last 10 periods.

Our volume indicators reflect volume flowing into and out of PayPal at a relatively equal pace (neutral).

Our trend forecasting oscillators are currently bullish on PayPal and have had this outlook for the last 35 periods.

The security price has set a new 14-period high while our momentum oscillator has not.

This is a bearish divergence.

Overall, the bias in prices is: Upwards.

A white body occurred (because prices closed higher than they opened).

During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles.

During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.