Please ensure Javascript is enabled for purposes of website accessibility

Why PayPal Stock Soared 58% in May

By Joe Tenebruso – Jun 7, 2020 at 11:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The online payments leader is benefiting from the growth of digital transactions.

What happened

Shares of PayPal (PYPL -0.79%) jumped 26% last month, according to data from S&P Global Market Intelligence, following the release of the financial technology company's strong first-quarter results. 

So what

PayPal added more than 20 million net new active accounts, including the 10.2 million it obtained from its $4 billion acquisition of online savings platform Honey in January. That helped PayPal's total payment volume rise by 18%, which, in turn, fueled a 12% increase in revenue, to $4.6 billion.

A person is holding an upwardly sloping digital chart.

PayPal's payment platform is growing at an impressive rate. Image source: Getty Images.

Better still, PayPal also continues to strengthen its cash flow metrics. Its operating and cash flow improved by 46% and 60%, respectively, to $1.5 billion and $1.3 billion.

"As our platform sees record increases in both new customer accounts and transactions, it is clear that PayPal's products are more important and relevant than ever before," CEO Dan Schulman said in a press release.

Now what

These strong results -- along with promising trends in April -- bode well for PayPal and its investors. The digital payments leader expects to deliver another impressive performance in the second quarter, including revenue growth of approximately 13% and adjusted earnings-per-share growth of 15% to 20%.

"The strength of our customer value proposition combined with the acceleration of digital payments adoption significantly accelerated in April, with increased demand and engagement," Schulman said.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends PayPal Holdings and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

PayPal Holdings, Inc. Stock Quote
PayPal Holdings, Inc.
PYPL
$86.97 (-0.79%) $0.69

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.