PayPal Shares Soar on Record User Growth

Despite its first-quarter earnings miss, PayPal (PYPL) just got a boost from April’s record active-user growth…

This pushed PYPL shares up 14% to $146.29 today.

The online payment system company’s adjusted earnings per share (“EPS”) for the first quarter was $0.66, below the expected EPS of $0.75. The company’s revenue for the quarter was $4.62 billion, below the consensus of $4.74 billion.

However, the company’s user growth and electronic payment transactions in April from PayPal and Venmo completely overshadowed the lower-than-expected results.

For the month, PYPL said it saw 7.4 million new active accounts – averaging 250,000 net new active accounts added per day. That’s 135% growth in April, a record for the company.

The company also saw 1.2 billion electronic payment transactions last month – an increase of 20%. According to the press release, its total payment volume was up roughly 20% to $68 billion as well.

Looking forward, the company anticipates volume growth to slow in May and June due to disruptions in travel and events. For the second quarter, it forecasts year-over-year EPS growth of 15% to 20%. PYPL also expects revenue to grow 13%, ahead of the estimated 11.1%.

However, for full-year 2020, PYPL withdrew its revenue and earnings guidance.

The new trends that have emerged from the virus are unlikely to reverse once things go back to “normal completely.” People are likely to continue using less cash due to the pandemic. And companies like PYPL are already making deals with businesses such as supermarkets to build out contactless payments.

So, as these broader trends change the buying landscape, it’s likely we’ll see companies like PYPL, American Express (AXP), and Visa (V) continue to grow as a result.