Please ensure Javascript is enabled for purposes of website accessibility

Why PayPal Stock Rose to a New All-Time High Today

By Joe Tenebruso – Jul 30, 2020 at 6:30PM

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 digital payment leader is a major beneficiary of the global trend away from cash.

What happened

Shares of PayPal Holdings (PYPL -2.96%) climbed 4.3% to a new closing high of $192.51 on Thursday, following the online payment processing giant's strong second-quarter results. 

So what

PayPal's total payment volume jumped 29% to $222 billion, while its revenue leapt 22% to $5.3 billion. The gains were fueled in part by a surge in e-commerce sales during the COVID-19 crisis, as stay-at-home orders and other social distancing guidelines drove more people to shop online than ever before.

"In the midst of the COVID-19 pandemic, digital payments have become more important and essential than ever," CEO Dan Schulman said in a press release. "Our record performance in the second quarter -- our strongest quarter ever -- reaffirms the relevance of PayPal in the unfolding digital future."

A person is pointing to an upwardly sloping digital chart.

PayPal's stock hit a record high on Thursday. Image source: Getty Images.

Better still, PayPal is growing more profitable as it expands its revenue base. Its adjusted operating income and earnings per share both surged 49%, to $1.5 billion and $1.07. PayPal's cash flow generation was even more impressive; its operating and free cash flow soared 103% and 112%, respectively, to $2.4 billion and $2.2 billion.

Now what 

PayPal is clearly one of the winners in the migration away from cash and toward digital transactions. COVID-19 is only serving to accelerate this global trend, and PayPal is doing its best to make the most of its current opportunities.

"This is our time," Schulman said during a conference call with analysts. "We intend to seize the moment." 

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
$86.07 (-2.96%) $-2.63

*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
332%
 
S&P 500 Returns
104%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/30/2022.

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.