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PayPal Holdings, Inc. (PYPL - Free Report) is scheduled to report third-quarter 2023 results on Nov 1.

For the third quarter, the company projects revenues at $7.4 billion, indicating year-over-year growth of 8% on a spot rate basis and a currency-neutral basis. The Zacks Consensus Estimate for revenues is pegged at $7.39 billion, indicating an improvement of 8% from the prior-year quarter’s reported figure.

PayPal projects non-GAAP earnings between $1.22 and $1.24 per share, suggesting growth of 13-14% on a year-over-year basis. The Zacks Consensus Estimate for earnings is pegged at $1.22 per share, indicating growth of 12.9% from the year-ago reported figure.

The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters while matching the same once, delivering an earnings surprise of 5.84%, on average.

PayPal Holdings, Inc. Price and EPS Surprise

PayPal Holdings, Inc. price-eps-surprise | PayPal Holdings, Inc. Quote

Factors to Note

Strength in PayPal’s product portfolio might have continued driving its customer momentum in the quarter under review.

Strong monetization efforts of Venmo are likely to have aided its adoption rate in the to-be-reported quarter.

The growing momentum of the company’s buy now pay later (“BNPL”) solution is anticipated to have contributed well.

Advancing PayPal’s Checkout experiences are expected to have sustained the company’s momentum in the to-be-reported quarter.

Increasing user engagements on PayPal’s platform, owing to a continuous shift in customer preference toward contactless payments, might have been a plus.

All these factors are likely to have driven growth in the company’s payment volume as well as net new active accounts metric in the third quarter.

Key Metrics to Consider

Total payment volume (“TPV”), active customer accounts, payment transactions per active account and the total number of payment transactions are considered key metrics for analyzing PayPal’s business growth.

For the third quarter, the Zacks Consensus Estimate for active customer accounts is pegged at 434 million, suggesting a 0.5% rise from the year-ago quarter’s reported figure.

The consensus mark for payment transactions per active user is pinned at 55 million, suggesting growth of 10% from the year-ago quarter’s reported figure.

The consensus estimate for the total number of payment transactions is pegged at 6.33 billion, indicating an improvement of 12.2% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for TPV is pegged at $381.85 billion, suggesting growth of 13.3% on a year-over-year basis.

What Our Model Says

Our proven model predicts an earnings beat for PayPal this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat and that’s the case here, as you will see below.  

PayPal has an Earnings ESP of +0.66%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
 
PYPL carries a Zacks Rank #3. 

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