Why PayPal Stock Could Be a Solid Pick for Investors

PayPal’s reported move to cryptocurrency is catching investor interest

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Online payment powerhouse PayPal Holdings, Inc.'s (NASDAQ:PYPL) beginnings date back to 1998. Today, the company is valued at more than $250 billion and owns several major business like Xoom Corporation, Honey, Venmo, and Braintree. Most recently, PayPal has delved into the world of cryptocurrency, which is a hot territory for investors. PayPal announced on Oct. 21 that the platform would allow its users to buy, hold and sell cryptocurrency directly from the user's PayPal account.

In general, PayPal stock has performed phenomenally since the start of this year. PayPal stock is up a massive 95% year-to-date and 161% from its 52-week low of $82.07. PayPal stock is currently trading just off of its record-high of $216.07.

PayPal stock is a promising investment from a growth and fundamentals point of view. The company continues to grow its revenue by significant margins every year. PayPal has increased its revenue by almost $8 billion since 2016. With the exception of 2020, PayPal Holdings has also experienced significant growth to the bottom line for many consecutive years. On top of the steady revenue and net profit growth, the company continues to expand with announcements of promising partnerships and acquisitions. 

PYPLChartSinceJan

While PayPal isn't expected to release earnings again until early February of 2021, investors should know how PayPal stock has fared over the past 12 months. The pandemic has uniquely impacted almost every stock, so it's always critical to examine how a stock performs in extreme markets before investing capital. PayPal has beat expectations on three of its four most recent earnings reports.

In the fourth quarter of 2019, pre-pandemic, PayPal beat expectations by $0.03. The company reported an earnings per share (EPS) of $0.86 for PYPL. In the first quarter of 2020, pre-pandemic as well, the company dropped its EPS down to $0.66 for PayPal, and also missed expectations by a margin of $0.09. In the heat of the COVID-19 pandemic, PayPal actually reported an increase in its EPS for the second quarter of 2020. The company reported an EPS of $1.07 for PYPL stock and beat expectations by a big margin of $0.19. Most recently, when reporting on the third quarter of 2020, PayPal beat its earnings target again, this time by $0.13 (14%). The company maintained their EPS of $1.07 from the previous quarter.

Further, PayPal stock sports a Schaeffer's Volatility Scorecard (SVS) of 90 out of 100, indicating the equity is boon for options traders strategies going forward. Overall, the company’s stock should continue growing for many years if it continues to innovate like it’s done thus far and its dive into cryptocurrency really pays off.

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