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PayPal (PYPL) to Post Q3 Earnings: What's in the Offing?

PayPal Holdings, Inc. PYPL is scheduled to report third-quarter 2022 results on Nov 3.

PYPL projects third-quarter revenues at $6.8 billion, suggesting growth of 10% on a current spot rate basis and 12% on a currency-neutral basis from the respective year-ago quarter’s reported figures. The Zacks Consensus Estimate for revenues is pegged at $6.82 billion, indicating an improvement of 10.3% from the prior-year quarter’s reported figure.

PayPal envisions non-GAAP earnings in the range of 94-96 cents per share. The Zacks Consensus Estimate for earnings is pegged at 95 per share, suggesting a decline of 14.4% from the year-ago quarter’s reported figure. Further, the figure has been stable over the past 30 days.

PYPL’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed the same once and met on another occasion, the average surprise being 3.07%.

PayPal Holdings, Inc. Price and EPS Surprise

PayPal Holdings, Inc. Price and EPS Surprise
PayPal Holdings, Inc. Price and EPS Surprise

PayPal Holdings, Inc. price-eps-surprise | PayPal Holdings, Inc. Quote

Factors at Play

The impacts of PayPal’s robust product portfolio, including Venmo and merchant services, are anticipated to get reflected in third-quarter results.

Strong monetization efforts of Venmo are likely to have aided its adoption rate in the to-be-reported quarter.

Robust PayPal Checkout experiences are expected to have sustained PYPL’s momentum in the quarter under review.

PayPal is expected to have gained from the growing proliferation of buy now pay later (BNPL) solution on the back of its strong offerings. PYPL Pay Monthly is likely to have continued aiding its customer momentum.

Strengthening offerings for small businesses are likely to have aided growth in PayPal’s payments volume in the to-be-reported quarter.

Key Metrics to Consider

Total payment volume (TPV), active customer accounts, payment transactions per active account and the total number of payment transactions are considered the key metrics for analyzing PayPal’s business growth.

For the third quarter, the Zacks Consensus Estimate for active customer accounts is pegged at 438 million, indicating 5.3% growth from the year-ago quarter’s reported figure.

The consensus mark for payment transactions per active user is pegged at 49.41 million, suggesting growth of 11.8% from the year-ago quarter’s reported number.

The consensus estimate for the total number of payment transactions is pinned at 5.8 billion, indicating an improvement of 18.7% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for TPV is pegged at $344.5 billion, suggesting growth of 11.2% from the year-ago quarter’s reported figure.

What Our Model Says

Our proven model conclusively predicts an earnings beat for PayPal this time around, which is precisely the case here. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

PayPal has an Earnings ESP of +2.53% and a Zacks Rank #3.

Stocks to Consider

Here are some stocks that you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.

Baidu BIDU has an Earnings ESP of +0.82% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Baidu is set to report third-quarter 2022 results on Nov 16. The Zacks Consensus Estimate for BIDU’s earnings is pegged at $2.44 per share, suggesting an increase of 7.02% from the prior-year period’s reported figure.

The Trade Desk TTD has an Earnings ESP of +2.13% and a Zacks Rank of 2 at present.

The Trade Desk is scheduled to release third-quarter 2022 results on Nov 9. The Zacks Consensus Estimate for TTD’s earnings is pegged at 24 cents per share, suggesting an increase of 33.3% from the prior-year quarter’s reported figure.

Tencent Music Entertainment Group TME has an Earnings ESP of +4.76% and a Zacks Rank of 2 at present.

Tencent Music is scheduled to release third-quarter 2022 results on Nov 15. The Zacks Consensus Estimate for TME’s earnings is pegged at 11 cents per share, suggesting an increase of 22.2% from the prior-year quarter’s reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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