Shares of digital-payments specialist PayPal Holdings (NASDAQ:PYPL) rose 36.1% in the first six months of 2019, according to data from S&P Global Market Intelligence. The surge was more of a steady climb than the result of any particular trigger event.
PayPal beat Wall Street's bottom-line expectations in each of the two earnings reports it presented during the first half, including a large outperformance in the first quarter. The company now sports 277 million active accounts, managing $161 billion of payments in the first quarter alone.
Mobile-payment service Venmo has 40 million active users and is growing rapidly. Venmo is very popular among younger consumers, thanks to a comments system that makes this payment service feel almost like a social media platform. Here, PayPal is exploring new monetization strategies for the mostly free-to-use service such as Venmo-branded credit and debit cards, as well as the ability to send payments faster for a small fee.
The company also announced a new partnership with Facebook's Instagram service, made another strategic tie-up with Uber, and started working toward a blockchain-based payment service to call its own. All of these initiatives helped PayPal's stock rise higher.
We're still talking about a relatively young growth stock here. PayPal's payment-processing volume may seem impressive, but $161 billion per quarter is nothing next to sector-giant Visa's $2.8 trillion for the same period. There's a lot of growing left to do, and PayPal is attacking this huge addressable market with an innovative attitude. I wouldn't be surprised to see the stock continue to climb in the second quarter -- and far beyond.