Mizuho, KBW Examine Mobile Payments Leader PayPal’s Earnings Call

Mobile payments are subject to corporate earnings calls just as much as anyone else, and when PayPal set up its call, plenty of users took notice. Not surprisingly, two major names in analysis—Mizuho and Keefe, Bruyette and Woods (KBW)—were among them, and tipped us off about just what they thought about the PayPal earnings call. The news was certainly upbeat, and should have investors feeling just a little more peace of mind about that PayPal stock in their portfolios.

Mizuho, via analyst Thomas McCrohan, was a bit restrained, yet positive overall. There was no doubt, McCrohan noted, that PayPal’s quarterly results were sound. Its fiscal year 2019 figures, meanwhile, were also looking positive, showing that PayPal isn’t just doing well today but is likely to continue doing well. However, McCrohan tempered this assessment by noting that investors likely saw these figures coming.

McCrohan also notes that the move from “other value added services” like merchant lending and consumer lending in the US and abroad to new initiatives is proving somewhat sluggish, and that may put a bit of a ceiling on earnings growth.

Meanwhile, KBW’s figures found PayPal’s word about future developments “encouraging”, including new efforts to monetize Venmo, which we’ve heard about recently. Yet even KBW suggests that “meaningful earnings contribution from Venmo could still be a couple of years away.”

KBW also pointed out developments that we’d been tracking here for some time now, including the growth of Venmo overall, and several recent new partnerships, including with Walmart, AXP, and Funds Now.

Essentially, KBW and Mizuho seem to have noticed the exact same points, but are reacting to them just a little differently. Where Mizuho sees figures that are essentially baked-in, KBW seems to see figures that are going to keep investors interested and possibly picking up the buy pace on new shares. Mizuho sees new efforts that aren’t going as fast as some might like, but KBW sees new possibilities coming in the short term.

Even splitting the difference between these two assessments—and they’re not exactly far apart to begin with—suggests that PayPal is looking at a pretty bright future in the short term, allowing it to keep its position as one of the biggest names in mobile payments.