This company is a hidden hi-growth story, as legacy eBay Marketplaces is only growing at 6%.
We have similar styles, Najorf! Love this PayPal story.
Shares are down about 4% in AH trading but, at first glance, I don’t see anything to be concerned about. Looks like another good quarter. I’ve said this before, but PayPal is one of the most consistently good companies I follow. Via CNBC:
PayPal reported second-quarter earnings that topped Wall Street estimates on Wednesday, but its third-quarter revenue outlook fell short.
Here’s how the company did compared with what Wall Street expected:
Earnings per share: 58 cents vs. 57 cents, forecast by Thomson Reuters
Revenue: $3.86 billion vs. $3.81 billion, forecast by Thomson Reuters
That revenue figure represents 23 percent growth, from the $3.14 billion PayPal reported in the year-ago quarter. For the third quarter, PayPal’s profit forecast was in line with analyst expectations, but its revenue outlook missed. The company said it expects adjusted earnings per share between 53 cents and 55 cents on revenue between $3.62 billion and $3.67 billion. Analysts had projected third-quarter earnings of 54 cents a share on revenue of $3.71 billion, according to Thomson Reuters consensus estimates.
From https://www.cnbc.com/2018/07/25/paypal-earnings-q2-2018.html…
So, revenue and earnings beat estimates but guidance for next quarter fell $40M or so short of “estimates” – I don’t think we need to discuss how ridiculous that is. Either way, the stock had a nice run this quarter. Here’s a look at the numbers:
Revenues (millions) Q1 Q2 Q3 Q4
2014 1874 1983 1971 2193
2015 2137 2297 2258 2556
2016 2544 2650 2667 2981
2017 2975 3136 3239 3744
2018 3685 3857
EPS (non-GAAP) Q1 Q2 Q3 Q4
2014 0.27 0.28 0.24 0.28
2015 0.29 0.32 0.31 0.36
2016 0.37 0.36 0.35 0.42
2017 0.44 0.46 0.46 0.55
2018 0.57 0.58
2018 Q2 Earnings (Current)
Revenue Growth (billions)
2017 Q2 TTM Revenue = 11.76
2018 Q2 TTM Revenue = 14.53
YOY Revenue Growth = 23.6%, previous quarter 22.45%
EPS Growth (non-GAAP)
2017 Q2 TTM EPS = 1.67
2018 Q2 TTM EPS = 2.16
YOY EPS Growth = 29.3%, previous quarter 29.9%
Non-GAAP P/E (Check Current Price) = 91.37/2.16 = 42.3
Trailing 1YPEG = 42.3/29.3 = 1.44
PayPal Metrics
Here is a look at some of PayPal’s other important metrics growth:
of active accounts: 244M, +15% YOY
Payment transactions: 2.327B, +28% YOY
Payment transactions per active account: 35.7, +9% YOY
Total Payment Volume (TPV): $139.4B, +29% YOY
Mobile Payment Volume: $54B, +49% YOY
Transaction margin: 56.0%
Operating margin (non-GAAP): 21.3%
Venmo processed $14B TPV, +78% YOY
Cash and cash equivalents: $6.3B
Short term borrowings: $2.0B
Repurchased 6.1M shares, approx. $500M
Authorized new $10B buyback program, to go into effect when current buyback program ($2.7B remaining of $5B) finishes
And here’s a look at the historic growth of those numbers:
# of Active Accounts (millions) Q1 Q2 Q3 Q4
2014 148 152 157 162
2015 165 169 173 179
2016 184 188 192 197
2017 203 210 218 227
2018 237 244
Payment Transactions (millions) Q1 Q2 Q3 Q4
2014 918 930 972 1144
2015 1123 1161 1216 1428
2016 1414 1448 1512 1755
2017 1771 1817 1941 2240
2018 2214 2327
Transactions Per Active Account Q1 Q2 Q3 Q4
2014 23 23 24 24.5
2015 25.2 26.1 26.9 27.5
2016 28.4 29.4 30.2 31.1
2017 31.7 32.3 32.8 33.6
2018 34.7 35.7
TPV (billions) Q1 Q2 Q3 Q4
2014 53.676 56.736 58.184 66.039
2015 63.021 67.482 69.738 81.523
2016 81.056 86.208 87.403 99.348
2017 99.327 106.44 114.05 131.45
2018 132.36 139.40
Transaction Margin (%) Q1 Q2 Q3 Q4
2014 65.0 65.7 63.1 63.5
2015 64.2 63.8 62.3 61.1
2016 60.4 59.8 58.7 57.7
2017 56.7 56.3 54.8 65.1
2018 57.1 56.0
Operating Margin (%)(non-GAAP) Q1 Q2 Q3 Q4
2014 18.4 20.4
2015 22.1 22.6 19.9 20.8
2016 21.1 19.9 18.4 21.1
2017 21.6 21.0 20.0 22.0
2018 22.5 21.3
Will be back in a day or two with notes from the conference call.
Matt
Long PYPL
MasterCard (MA), PayPal (PYPL), Skechers (SKX) and Square (SQ) Ticker Guide
See all my holdings at http://my.fool.com/profile/TMFCochrane/info.aspx