PayPal (PYPL) Hits 52-Week High On Partnership With Acorns

Shares of PayPal Holdings, Inc. (NASDAQ:PYPL) hit a new 52-week high of $78.43 on Nov 21, eventually closing at $77.77.

The company has a market cap of $93.5 billion. Average volume of shares traded in the last three months was roughly 7,828K.

The company’s share price jumped 16% following its encouraging third-quarter 2017 results on Oct 19. Shares of PayPal have gained 97.1% year to date, substantially outperforming the industry’s 33.2% rally.

Share Price Drivers

PayPal is a worldwide online payments system operator. It is riding high on partnerships and mobile centrism.

The payment processor company recently entered into a partnership with Acorns Grow Inc., an investment startup, to offer its customers robotic trading options. The deal will allow PayPal users to invest or set up a savings account with the five-year-old automated investment startup.This will give PayPal users the option to link their funds to an Acorns investment account, allowing them to choose between one-time investment options and recurring payments.

The recent partnership with Acorns comes after PayPal struck deals with more than 20 new partners such as Facebook (NASDAQ:FB), Baidu, and JPMorgan Chase (NYSE:JPM) in the last year and a half. Also, PayPal’s ongoing strategic partnerships with Visa and MasterCard offer great flexibility and choice to consumers.

Over a year’s time, the company has placed itself in a favorable position for partnerships spanning multiple original equipment manufacturers (OEM), technology companies, mobile carriers, retailers and financial institutions.

Also, the company reported strong third-quarter results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Non-GAAP earnings of 46 cents surpassed the Zacks Consensus Estimate of 2 cents. Also, revenues of $3.24 billion came in above the company’s guided range of $3.14-$3.19 billion.

The company remains optimistic about its revenue growth in 2017 and therefore has increased its expectations. The company now expects revenues between $12.92 billion and $12.98 billion compared with its earlier expectations of $12.78-$12.88 billion. The Zacks Consensus Estimate is pegged at 12.97 billion.

Additionally, PayPal delivered an average positive earnings surprise of nearly 5.35% in the trailing four quarters. The company’s comprehensive payment structure, continued innovation and strong long-term growth potential, position it well.

PayPal Holdings, Inc. Price and Consensus

PayPal Holdings, Inc. Price and Consensus | PayPal Holdings, Inc. Quote

Zacks Rank & Stocks to Consider

PayPal currently has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader technology sector are NVIDIA Corporation (NASDAQ:NVDA) and SMART Global Holdings, Inc. (NASDAQ:SGH) , each carrying a Zacks Rank #1 (Strong Buy), while Applied Materials, Inc. (NASDAQ:AMAT) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings per share growth rate for NVIDIA Corporation, SMART Global and Applied Materials is projected to be 11.2%, 15% and 16.9%, respectively.

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