By now, we’ve probably all used some sort of mobile payment technology. Whether it’s using our smartphone to pay for coffee at Starbucks SBUX or transferring money through an app, this kind of monetary technology using our phone has fully integrated our lives.
While tech giants like Alphabet GOOGL and PayPal PYPL—PayPal owns the incredibly popular app Venmo, which lets you easily send or request money—certainly dominate the industry here in the U.S., Chinese juggernauts Alibaba BABA and Tencent TCEHY are investing hundreds of millions of dollars into the space to help mobile payment technology grow and expand internationally, particularly in India.
The mobile payments industry is quickly changing, and investors have taken notice. With this in mind, check out these three mobile payment technology stocks that show promise in this expanding industry.
Helmed by Twitter TWTR chief executive Jack Dorsey, Square provides payments and point-of-sale devices including hardware and software. The payments company began with its flagship white credit card reader, but has since expanded into chip cards and NFC payments as well as its Cash app that lets people pay each other back instantly.
Square is a #1 (Strong Buy) on the Zacks Rank, with a VGM score of ‘C.’ Its industry, Internet-Software, rests in the top 32% of all industries ranked on the Zacks Industry Rank. Square’s earnings growth for 2017 looks very promising. For the current quarter, the company expects year-over-year earnings growth of almost 42%, with two positive revisions in the last 60 days compared to none lower.
For the current year, Square anticipates growth of 24.5%, with 5 positive estimate revisions compared to one lower in the same time frame. SQ has an average earnings surprise of over 23%, and beaten estimates for the past 3 consecutive quarters.
Visa operates the world’s largest retail electronic payments network, and is one of the most recognized global financial services brands. The company serves banks, merchants, consumers, businesses, and government entities, and helps facilitate global commerce through the transfer of value and information. Visa has been rapidly boosting its mobile payment offerings, and it’s easier than ever to add your Visa card to your payment-enabled mobile phone or device.
Visa is a #2 (Buy) on the Zacks Rank, with a VGM score of ‘C.’ Its Industry, Financial Transaction Services, sits in the top 31% of all industries ranked on the Zacks Industry Rank. Visa just reported solid second-quarter fiscal 2017 results, with beats on both the top and bottom lines. Higher revenues were driven by the acquisition of Visa Europe and consistent growth in cross-border volume and processed transactions.
Its earnings growth estimates look pretty promising, too. For the current quarter, Visa expects year-over-year earnings growth of 17.15%, with one positive revision in the last seven days compared to none lower. For the current year, the company expects year-over-year earnings growth of 18.81%, with two positive revisions in the last seven days compared to none lower in the same time frame. Visa has beaten expectations in the past four consecutive quarters, and has an average earnings surprise of 7.24%.
Best known for its flagship iPhone, Apple is one of the most recognizable brands in the world. It designs, manufactures, and markets mobile communications and media devices, personal computers, tablets, and portable digital music players, in addition to a portfolio of consumer and professional software applications.
Apple’s Apple Pay is the company’s popular contactless payment system for mobile phones, and in its last quarterly earnings report, CEO Tim Cook announced that transaction volume grew 500% year-over-year, and the service is now in a total of 13 markets following recent launches in countries abroad. Apple Pay users also tripled.
Apple is a #2 (Buy) on the Zacks Rank, with a VGM score of ‘A.’ It industry, Computer-Mini Computers, rests in the top 9% of all industries ranked on the Zacks Industry Rank. Looking at Apple’s growth estimates, 2017 looks to be a good year for the iPhone maker. The company expects modest year-over-year growth of 5.86% for the current quarter. For the current year, Apple anticipates year-over-year earnings growth of 7.66%, with 3 positive estimate revisions in the last 30 days. Apple has beaten earnings expectations in the past three consecutive quarters.
For more information on the mobile payments industry, check out a special episode of the Zacks Friday Finish Line, where Content Writer Ryan McQueeney and Editor Maddy Johnson were joined by Andrew Chanin, the CEO of PureFunds, to discuss the ISE Mobile Payments ETF IPAY, the world’s first mobile/electronic payments ETF that was created to provide a way to invest in the growing mobile payments industry.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Could you imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Alibaba Group Holding Limited (BABA): Free Stock Analysis Report
Tencent Holding Ltd. (TCEHY): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
Square, Inc. (SQ): Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report
Twitter, Inc. (TWTR): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
PF ISE MOBLPAY (IPAY): ETF Research Reports
Starbucks Corporation (SBUX): Free Stock Analysis Report
Visa Inc. (V): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research