Fly Intel: What to watch in PayPal earnings report

PayPal (PYPL) is scheduled to report results of its first fiscal quarter after market close on May 5, with a conference call scheduled for 5:00 pm EDT. What to watch for: 1. OUTLOOK: During the company’s last earnings call, PayPal said it sees first quarter adjusted earnings per share growth of about 50% and revenue up 28% at current spot rates, 26% on an FXN basis. For the full year 2021, the company sees adjusted earnings per share up about 17%, revenue up about 19% at current spot rates and about 17% on an FXN basis to approximately $25.5B. PayPal also sees full year 2021 TPV growing in the high 20s on a percentage basis and about 50M NNAs to be added to its platform in 2021. 2. CRYPTOCURRENCY: Back in March, PayPal announced the launch of Checkout with Crypto, a new feature which expands the utility of cryptocurrency. Available at millions of global online businesses and continuing to expand over the coming months, PayPal customers with cryptocurrency holdings in the U.S. will be able to choose to check out with crypto within PayPal at checkout. Last month, Venmo announced the launch of crypto on Venmo, a new way for its customers to buy, hold and sell cryptocurrency directly within the Venmo app. With crypto on Venmo, customers can view cryptocurrency trends, buy or sell crypto, and access in-app guides and videos to help answer commonly asked questions and learn more about the world of crypto. Customers using crypto on Venmo can choose from four types of cryptocurrency: Bitcoin, Ethereum, Litecoin and Bitcoin Cash. Meanwhile on Thursday, Coinbase (COIN) product manager Eddie Lo said in blog post that, “We are now offering millions of customers in the US a simple and speedy way to buy crypto on Coinbase using your debit cards and bank accounts linked to PayPal. Buying crypto should be simple and easy. However, moving money in the traditional world of finance can be anything but. ACH and wire transfers can take time and effort, and we know you are expecting faster and more seamless ways to make crypto purchases. Now, you can instantly fund crypto purchases with PayPal in just a few taps.” 3. ‘LEAST COMPETITIVE’ CRYPTO APP: Maximillian Friedrich, a top fintech analyst for Cathie Wood, found PayPal’s Venmo is the “least competitive” crypto trading app. After comparing key features of Square (SQ) Cash App, Venmo, and Coinbase, the analyst said via Twitter that Venmo is the least appealing app because it offers fewer currencies and has higher fees. “Venmo seems least competitive given mostly higher fees than Cash App/Coinbase while offering signific. less currencies than Coinbase,” Friedrich said. 4. STRONGEST BRAND: When Redburn analyst Fahed Kunwar initiated coverage of stock with a Buy rating back in March, he told investors that he believes PayPal has “the strongest brand of the PSPs” along with the “unique advantage” of having and being able to leverage its customer brand through its ubiquitous payment button. While expanding its digital wallet capability via Venmo, the company is adding to its consumer revenue stream and brand and complementing its existing merchant business, the analyst argued.