In this video, I will be talking about PayPal (PYPL 2.90%) and why although the stock is down 45% year to date and 65% since its all-time high, the business itself might look a bit better. You can find the video below, but here are some highlights.
- The company reported revenue of $6.92 billion, up 13% year over year (YOY), and earnings per share of $1.11, up 4% YOY.
- Total payment volume on the platform grew 33% in 2021 to $1.25 trillion and is expected to surpass $1.5 trillion in 2022.
- In 2021, 19.3 billion transactions were made by PayPal's 426 million active users. That's about 45 payment transactions per active account over the trailing 12 months. This figure has been consistently rising over time but we might see some change soon.
- Management dropped its goal of 750 million active accounts by 2025 to focus on acquiring high-value customers. This is why it guided for just 15 million to 20 million net new actives this year, well below prior guidance of 30 million to 40 million.
- Transitioning away from eBay will put an incremental $600 million of pressure on the company's top line over the next two quarters. Excluding eBay, revenue grew 22%, which is a good sign that the underlying business is doing well.
- On the negative side of things, in Q1 2022, Block's Cash App reached 9.5 million U.S. downloads, more than PayPal and Venmo combined.
- According to a survey conducted by Piper Sandler, teens said they used PayPal's buy now, pay later service most frequently, followed by Block's Afterpay.
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*Stock prices used were the closing prices of April 12, 2022. The video was published on April 13, 2022.
