Wall Street expects PayPal to earn 43 cents per share, non-GAAP, on $3.18 billion in third-quarter sales. Ahead of the 5 p.m. ET call, shares of PayPal were down 1.25% at $66.42.
PayPal generated buzz earlier this week when it announced that Venmo's millennial-heavy user base can now make payments at two million shops, and investors will listen for more detail on the initiative's potential.
Venmo is a fast-growing app that lets users exchange cash. CFO John Rainey went so far as to call it the "crown jewel of PayPal" at a September conference.
Most of the money swapping by Venmo users does not generate revenue for PayPal, however. Payments to shops would provide an answer to how PayPal can monetize the app, which BTIG analyst Mark Palmer said is the top question for Thursday's call.
WePay develops tech that software developers such as cloud accounting software developer FreshBooks and businesses including crowdfunding site GoFundMe use to integrate payments into their platforms. The company is is a competitor to PayPal's Braintree, Bernstein analyst Lisa Ellis observed in an email, and JPMorgan's purchase will likely come up during the call.
Anticipation is mounting for PayPal to make a large acquisition, Ellis further suggested.
Vantiv's (VNTV) $10.4 billion purchase of U.K. payment processor Worldpay and Visa's (V - Get Report) strategic investment in Danish online payments outfit Klarna could give PayPal more urgency to do a deal, Ellis suggested in a recent report. Both companies were potential targets for PayPal.
PayPal has about $6 billion in cash and consumer credit receivables worth about $4 billion to $4.5 billion that it could sell, as well as the capacity to take on another $3 billion to $4 billion in debt. The value of PayPal stock, which Schulman could use as currency in a deal, has gone up greatly in value.
Schulman is likely to look to Europe for targets, Bernstein's Ellis wrote. Much of its cash is in Europe and the company is under-represented in continental European markets. Dutch company Adyen, which carries about a $5 billion valuation, is akin to PayPal's Braintree in Europe and is the most likely candidate, the analyst suggested. Others include Klarna, with a $2.5 billion valuation, and U.S. companies Square (SQ - Get Report) ($12.3 billion market cap) and Braintree competitor Stripe ($9 billion private valuation).
PayPal declined to comment on potential acquisitions.
While Shulman has been acquisitive since joining eBay just before its 2015 split from eBay (EBAY - Get Report) , he has favored deals with smaller price tags. Schulman's deals have included the roughly $900 million purchase of money-transfer firm Xoom, the acquisition of mobile wallet company Paydiant for about $230 million, bill payment company Tio Networks for $230 million and small business lending outfit Swift Financial.
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