Can PayPal Continue to Grow Its Business?

PayPal Holdings (NASDAQ: PYPL) is one of the pioneers in the online payments space. The company operates a worldwide system that also supports money transfers between different countries and currencies. PayPal was listed back in 2002, and then bought by eBay, only to be spun out of eBay in 2015 in a second IPO.

PayPal just reported impressive Q3 2019 earnings, with revenue growing 19% year over year to $4.38 billion and net income after taxes increasing by 6% year over year to $462 million. In addition, the company added 9.8 million net new active accounts during the quarter, raising active accounts to 295 million for year-over-year growth of 16%. It’s surprising that a $124 billion market cap company is still able to post double-digit revenue and active subscriber growth, and PayPal definitely should rank as one of the stronger growth stocks out there.

However, the fact is that PayPal is only one of many players in an increasingly crowded online payments market space. The digital global economy is growing rapidly, with a total market opportunity of around $110 trillion in payment volumes. PayPal’s total payment volume (TPV) of $581 billion means it has a less-than-1% share of the market. The question here is: Can PayPal carry on growing its business, or will it get…


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