Online payment giant PayPal (NASDAQ:PYPL) recently released its fourth-quarter and full-year earnings report, and the company's financial results were better than expected. PayPal's revenue of $4.96 billion grew by 17% year over year and came out ahead of analyst estimates, and the company's adjusted operating income of $1.2 billion grew by 28% compared to the prior-year quarter. Furthermore, PayPal recorded adjusted earnings per share of $0.86, 24% higher than the year-ago period. 

PayPal also added 9.3 million active accounts during the fourth quarter, bringing its total to 305 million accounts, a 14% year-over-year growth. The company's total payment volume (TPV) -- the total dollar value of transactions successfully processed with PayPal -- was $199 billion during the fourth quarter, up 22% year over year.

Despite its strong results, investors weren't impressed with the company's first-quarter EPS guidance, which fell short of analysts' estimates, but even taking that into account, there are lots of reasons to purchase shares of the company. Here are three. 

A person holds a credit card in one hand and types on a laptop with the other

Image source: Getty Images.

1. The split from eBay won't mean a big hit to revenue

PayPal spun off from eBay (NASDAQ: EBAY) back in 2015, but the two companies are still attached. PayPal handles eBay's online payment processing, and this agreement has been a source of revenue for PayPal since it split from its former parent company. However, the agreement between PayPal and eBay is set to end this year, and eBay signed an agreement with Adyen for it to become its primary payment processing partner. Fortunately, PayPal has been steadily decreasing its reliance on eBay. 

During PayPal's fourth-quarter earnings conference call, CEO Dan Schulman said: "eBay's TPV continues to decline ... we anticipate that eBay will be approximately 6% of our total TPV by midyear." As PayPal's TPV from eBay has declined, so has its top-line exposure to the e-commerce giant. Schulman went on to say that PayPal's revenue from eBay declined from 26% of its total revenue in 2015 to 14% today. PayPal will continue to be a payment option for buyers on eBay, and while PayPal will suffer some losses once its agreement with the e-commerce platform ends, the company will likely be fine in the long run

2. Venmo continues to make headway 

Venmo -- PayPal's peer-to-peer (P2P) payment app -- has been an important growth driver for the company, and from the looks of it, that will continue to be the case. Venmo had over 52 million active accounts at the end of 2019, and the app processed $29 billion during the fourth quarter, a whopping 56% higher than the year-ago period.

Venmo's current annual revenue run rate is $450 million, and with PayPal adding such features as a Venmo credit card and Venmo Rewards program (with selected merchants), things could get even better. 

3. It has an exciting opportunity in the Chinese market

In December, PayPal closed its acquisition of 70% of GoPay, a China-based provider of mobile payments. With this transaction, PayPal became the first foreign online payment processing platform to enter the Chinese market, and this could pay off down the road. The transaction value of digital payments is set to increase significantly in the coming years in China, and although PayPal will have to contend with some domestic competition -- including Alibaba's Alipay -- this presents a major opportunity for PayPal. 

Key takeaway 

This company still has much room for growth, and PayPal's shares -- which grew by 28.6% last year and are already up by 10.7% this year -- could continue climbing given the strength of the company's underlying business and its growth opportunities.