With digitalization, digital payment providers like PayPal (PYPL) have seen tremendous growth over the years. PayPal went public with its initial offering in February 2020 with just $5.4 million shares at a share price of $13. Currently, the PayPal holding has a share price of $244.38 and expects to grow more with its Venmo app and other developments.
PayPal has seen an increase of 182.08% from March 2020 to March 2021, a remarkable growth within a year. With all this in account, investors are in a hurry to know could PayPal be a millionaire-maker stock to buy now? Does it have the potential to deliver a wealthy future for its investors? Let’s see what all PayPal has been up to and what to expect next.
PayPal’s Rally From Its Initiation To 2021
As the world went online, financial transactions also went digital, and since 2020 PayPal was the behemoth in digital payment providers. It merged with eBay after six months of initiation as eBay had almost $1.2 billion in their annual sales during the merge. Back then, the merge was a successful mission that helped both eBay and PayPal.
eBay got a competitive payment-solution while PayPal, greater visibility through eBay’s huge customer base. But the merge didn’t last for long and was ended in 2015, both splitting as two different stocks.
PayPal’s market capitalization is about $282.58B as of March 22, 2021, which implies that there is still more growth potential for this stock. They released the Q4 and full-year 2020 results on February 3. Thanks to its increased adoption during the pandemic, the quarterly revenue came at $6.12 billion. It has around 337 million users and merchants today, and the management expects an increase of this to 750 million users within five years.
How Can PayPal Be A Millionaire-Maker Stock?
The fuel of PayPal’s growth is its rapidly increasing users who frequently use their accounts and those who continue to sign-up with PayPal. Also, PayPal management should make more advancements in its plans to boost its customer base.
All the existing partnerships with credit cards and banks should be tempting enough to attract new customers. This mainly focuses on those people who like the idea of using any payment method from their PayPal digital wallet.
One such example is the partnership PayPal has with Facebook. Though integrated into Facebook’s Messenger, PayPal could extend its relationship by being a payment option in Facebook apps such as WhatsApp and Instagram. This would drive a good number of new customers and users to PayPal’s platform. If they increase their user base and the number of transactions their customers make, PayPal could be a millionaire-maker stock.
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The Venmo App Fuelling PayPal’s Growth
Around 16% of PayPal’s revenue in 2020 came from PayPal’s peer-to-peer payment app Venmo. Thanks to its built-in messaging system that makes it similar to a social media network, Venmo has seen extreme growth over the years. It closed 2020 with a revenue of $450 million, and PayPal predicts that it will close this year with a revenue of $900 million.
Another factor that could make PayPal a millionaire-maker stock is its plan to revamp the Venmo digital wallet. It aims to integrate multiple new features like enhanced direct deposit, check cashing, bill payment, crypto support, subscription management, etc. This will drive more users to Venmo, which will eventually boost PayPal’s growth.
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Could PayPal Be A Millionaire-Maker Stock?
PayPal is a valuable stock with over 35 healthy partnerships spanning across major credit cards, banks, and tech giants. In addition to this, the digital payment holder has recently partnered with Walmart. To facilitate its customers to use PayPal funds at the pump, the company has also made a good relationship with Chevron, BP, and ExxonMobil.
Apart from attracting new customers, the purported goal of PayPal is to position itself as the go-to default payment app for customers. It aims to mark its presence in the daily routines of people for making payments. As a positive sign of growth, the brick-and-mortar retailers and shops have also started accepting PayPal as a mobile payment method recently.
PayPal saw tremendous growth in 2020 by opening more than 21 million new accounts. Its Total Payment Volume (TPV) increased to $200 billion, which was a distinctive mark. Further, in February 2021, PayPal hit an all-time high of above $265.
With developments like growing its in-store presence, expanding cryptocurrency options, and other things, the management believes that it can generate $40 billion in free cash flow over the next five years. In the first quarter of 2021, PayPal expects revenue growth of around 28%, hoping to continue with the momentum in the coming decades as well.
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PayPal has various plans in-store for 2021, where increasing its customer base is just one of them. Thanks to its Venmo app, the issue of engagement is solved as the app facilitates high user engagement. The outlook for the future quarter of this stock is indeed bullish given its historic rallies and developments.
To answer every investors’ curious question, could PayPal holdings be a millionaire-maker?
If PayPal continues to expand its presence in the physical world, make more strong partnerships, and develop advanced digital wallet features investing in PayPal could be your gateway to secure a millionaire future.