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PayPal Holdings, Inc. (PYPL - Free Report) is scheduled to report fourth-quarter 2022 results on Feb 9.

The company projects fourth-quarter revenues of $7.375 billion, suggesting growth of 7% on a current spot rate basis and 9% on a currency-neutral basis from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for revenues is pegged at $7.39 billion, indicating an improvement of 6.9% from the prior-year quarter’s reported figure.

PayPal projects non-GAAP earnings of $1.18-$1.20 per share. The Zacks Consensus Estimate for earnings is pegged at $1.19 per share, suggesting growth of 7.2% from the year-ago reported figure.

Notably, the company surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed it once, and matched it on the other occasion, delivering an earnings surprise of 5.5%, on average.

PayPal Holdings, Inc. Price and EPS Surprise

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

Factors to Note

The impacts of PayPal’s robust product portfolio, including Venmo, are anticipated to get reflected in its fourth-quarter results.

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

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

PayPal is expected to have gained from the growing proliferation of online payment transactions in the fourth quarter amid the pandemic.

Strengthening user engagements on PayPal’s platform, owing to a continuous shift in customer preference toward contactless payments, are expected to have accelerated the company’s payment volume in the to-be-reported quarter.

It is anticipated to have accelerated growth of the company’s net new active accounts in the quarter under review.

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 to be the key metrics for analyzing PayPal’s business growth.

For the fourth quarter, the Zacks Consensus Estimate for active customer accounts is pegged at 442 million, suggesting a 3.8% rise from the year-ago quarter’s reported figure.

The consensus mark for payment transactions per active user is pegged at 51 million, suggesting growth of 12.3% from the year-ago quarter’s reported figure.

The consensus estimate for the total number of payment transactions is pegged at 6.08 billion, indicating an improvement of 13.8% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for TPV is pegged at $359.2 billion, suggesting growth of 5.8% on a year-over-year basis.

What Our Model Says 

Our proven model conclusively 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

PayPal has an Earnings ESP of +1.61% and a Zacks Rank #3. 

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