New moves from PayPal Holdings, Inc. (PYPL) are projected to add substantial user base growth to the firm, which in turn would fuel PayPal’s revenue and stock growth in the near term.
PayPal shares saw solid steady growth in 2020 and revenues and income growth over the last two quarters mirrored the trend as the COVID-19 pandemic intensified the shift of individuals and companies from conventional banking systems to more technological web applications. Apps such as Venmo, PayPal, and Square have essentially replaced money transactions.
For 2020, PayPal’s stock is more than 113 percent higher, with minor price reversals. PayPal’s market capitalization at the close of trade on Tuesday amounted to more than $272 billion, which is more than the capitalization of many of the major US banks: Bank of America (BAC), Wells Fargo (WFC), and Citi (C). At present, the technology-based financial services firm is also well ahead of JPMorgan Chase (JPM) with a market value of about $378 billion. However, several analysts have described 2020 as one of the worst years in the history of American banks.
Over the last two years, PayPal’s earnings per share and revenues have outperformed analyst forecasts, showing a clear jump in growth. PayPal’s new moves in creating a service for purchasing and selling cryptocurrencies (Bitcoin, Ethereum, and others) and the elimination of the conventional charge for cashing out government transfers have pushed the company to grow even more.
In November, about 350 million users used PayPal facilities, more than any other financial institution in the United States.
Due to the scarcity of transaction costs and the storage of cryptocurrencies in PayPal wallets, the company has drawn many curious Americans to the fast-growing cryptocurrencies. In comparison, following the high price of Bitcoin, PayPal was given the option to spend $1 on their purchase.
Analysts believe there is a synergistic effect: the rise in the price of Bitcoin is projected to lead to the increase in the share price of PayPal, and the price of Bitcoin, in exchange, is increasing because its owners can make payments via PayPal on more than 26 million online platforms across the world. This will certainly boost the popularity and use of Bitcoin in the coming months, raising the customer base as well as the growth of PayPal definitely to perform far above current levels.