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Venmo is introducing a tool that lets users take a photo of a receipt to automatically split a bill. The app will now itemize individual items and calculate the correct share for each person, including taxes and tips, rather than requiring users to do the math manually.
While this is a small feature, it targets the core reason people use Venmo: social payments. By removing the friction of manual entry, the company is trying to keep its 90 million users inside its app rather than switching to bank-owned rivals like Zelle. For a business that needs to keep its massive user base active to drive transaction fees, these small utility wins help defend its lead in the social payment market.
Source: PYMNTS
Barclays changed its rating on the payments company to Underweight, which is essentially a recommendation to sell. The firm set a price target of $53, which is about 7 percent lower than where the stock is currently trading.
This move follows the company's earnings report earlier in the week. While the business has been focused on cutting costs and buying back its own shares to boost profit per share, some analysts remain concerned that its core revenue growth is not picking up fast enough to offset competition from mobile wallets like Apple Pay.
Source: Barclays
After PayPal reported its October results, we updated our fair value and raised our projections for full-year earnings. We added the company’s first regular cash dividend and recent buyout talks to what we track. We also added the risk of increasing skepticism from specialist research firms to our thesis. We have reset our expectations for the profit the company keeps from transactions and for the growth of its branded checkout service.
PayPal earned $1.45 per share this quarter, which was higher than the $1.31 analysts expected. However, its revenue of $8.58 billion came in just under the $8.71 billion target. The company is currently focused on its transaction margin, which is the profit it keeps after paying bank and network fees. That margin grew 3 percent when excluding interest earned on customer cash, showing that the company is finding ways to make its core processing business more efficient.
Management raised its profit forecast for the rest of the year, signaling confidence that its turnaround is working. While the stock fell about 4 percent following the report, the underlying business is becoming more profitable on every dollar it handles. For long-term owners, the focus remains on whether PayPal can keep this margin growth steady while it tries to get its total sales growth back on track.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
PayPal is partnering with LianLian Global to help businesses pay their workers and sellers more easily. Through this deal, marketplaces and social commerce firms can send payments directly to PayPal accounts worldwide or to Venmo accounts in the U.S. This targets the growing gig economy, where influencers, developers, and independent contractors often need fast, cross-border payments.
This is a useful step for PayPal as it looks for more ways to make Venmo and its core wallets essential tools for businesses. By making it easier for companies to pay people through its network, PayPal can capture more of the money flowing through the creator and e-commerce markets. For long-term owners, this supports the goal of making Venmo a more complete financial hub rather than just a way for friends to send money.
Source: PRNewsWire
Management consistently sets a conservative bar and clears it by a small margin. This steady pattern of beats suggests they have a firm handle on costs even as revenue growth stays slow.
| Expectation | |
|---|---|
| EPS | $1.43 |
| Revenue | $8.91B |