PayPal Holdings Inc. (PYPL) - Get Report shares may open at an all-time high Friday after the group posted stronger-than-expected third quarter earnings and lifted its full-year guidance thanks to a surge in mobile payments.
PayPal said sales for the three months ending in September rose 21% from the same period last year to $3.24 billion, with management wringing adjusted earnings per share of $0.46, topping consensus analyst estimates of $3.18 billion and $0.43. Total payment volumes, the company said, surged 30% to $114 billion, a figure that also topped the Street consensus of $109 billion.
"In addition to our solid financial performance, we also reported record customer growth with the addition of 8.2 million net new actives," said CEO Dan Schulman. "As the world rapidly accelerates to digital payments, we have a tremendous opportunity in front of us."
PayPal sees revenue for the final three months of the year to come in between $3.57 billion to $3.63 billion, a modestly slower growth rate when compared to the third quarter, translating to an earnings per share rate of between $0.50 to $0.52.
PayPal shares were marked nearly 4% higher in pre-market trading from their Thursday close, suggesting an opening bell price of $69.90 each, a record high that would value the San Jose, Calif.-based group at just under $85 billion and extending the stock's year-to-date advance past 75%.
TheStreet's Eric Jhonsa notes that, given the serious challenges it faces from Apple Inc. (AAPL) - Get Report and Amazon.com Inc. (AMZN) - Get Report , it's hard to overlook the strength of PayPal's brand.
"It's telling that PayPal struck a deal with Apple earlier this year for iTunes and App Store payments. Or that it has deals in place with Google for Google Play and Android Pay transactions, with Facebook for Messenger payments and the Shop pages within Facebook's app and with Nintendo for digital game purchases," Jhonsa wrote. "Even when a major tech firm has a large platform with a "captive" audience, the firm often decided it's in its interests to make PayPal a payment option."
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