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Why PayPal Stock Popped Today

By Joe Tenebruso - Feb 4, 2021 at 6:01PM

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With more consumers shopping online during the coronavirus pandemic, the fintech star's profits are growing at a rapid clip.

What happened

Shares of PayPal (PYPL 2.23%) climbed 7% on Thursday, following the release of the digital payment leader's excellent fourth-quarter results. 

So what

PayPal added 16 million net new active accounts during the quarter, bringing its total customer count to 377 million. This rapid increase in active users helped to fuel a 39% year-over-year surge in total payment volume, to $277 billion, and a 23% jump in revenue, to $6.1 billion.

A person is holding an upwardly sloping digital chart.

Investors cheered PayPal's strong fourth-quarter performance. Image source: Getty Images.

PayPal's profit growth was also impressive. The fintech giant's adjusted operating income and earnings per share both rose 29% to $1.5 billion and $1.08, respectively.

"PayPal delivered record performance in 2020 as businesses of all sizes have digitized in the wake of the pandemic," CEO Dan Schulman said in a press release.

Now what 

PayPal expects fiscal 2021 to be another year of rapid expansion. The company forecasts that it will gain 50 million new active accounts. Management, in turn, sees revenue rising 19% to roughly $25.5 billion and adjusted earnings per share growing approximately 17% to $4.54.

With COVID-19 accelerating the growth of e-commerce around the world, PayPal's digital payment solutions are likely to remain in high demand in the years ahead.

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PayPal Holdings, Inc. Stock Quote
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