The company reaped the benefits of the global pandemic as fewer consumers and businesses wanted to use cash or touchscreens of debit and credit card machines.
“The move toward a cashless society has been led by the consumer, instead of by a government simply hoping to capture a record of every single transaction.,” Guilfoyle wrote recently on Real Money.
The Buy Now Pay Later option is also gaining traction among consumers. PayPal has expanded its offerings widely and allows customers to buy, sell and own cryptocurrencies via PayPal and Venmo.
The payments company launched its “Super App” that combines many of its offerings in one location and is competing against Square's SQ Cash App.
At the end of the second quarter, PayPal reported its net cash position (cash, equivalents, short-term investment) was “more than twice the size of the firm's total debt-load, while free cash flow, though down 33% for that quarter, still topped $1 billion,” Guilfoyle wrote.
The company also countered speculation that it was planning to acquire Pinterest PINS, the social media sharing company, for $45 billion or $70 a share. The rumor started a decline in PayPal’s stock.
Guilfoyle began a long position on PayPal after discussing the potential merger with other traders and concluded a combination did not make any sense for either company.
“For the most part, these younger traders were even more adamantly opposed to the potential deal than I was,” Guilfoyle wrote. “That confirmation by my younger peers provoked me to initiate a long position in PYPL.
PayPal is expected to report its third quarter financial results during the second week of November. The company reported its total active accounts was over 400 million during the second quarter and its total payment volume rose by 40% to $311 billion from 4.7 billion payment transactions, a gain of 27%. The volume of sales was high for merchant services which reported an increase of 48%,while Venmo processed $58 billion in total payment volume, a gain of 58%.