Analysts will be looking for details on PayPal’s peer-to-peer payments app Venmo, which has struggled to prove itself as a money-maker for the payment company. Earlier this year, PayPal unveiled new “checkout-button” options for online retailers to make it earlier to display Venmo as a payment option on their sites and apps.
“While the monetization of Venmo remains a longer term strategy (material impact not expected until FY20), the inability to show progress on this initiative could hurt estimates and valuation multiples,” Mizuho Bank analyst Thomas McCrohan said in a note to clients ahead of PayPal earnings.
In September, PayPal CEO Dan Schulman outlined a plan to monetize the app, telling Yahoo Finance that Venmo merchants, not consumers, would be footing the bill.
Investors will also be looking for details on PayPal’s M&A strategy on the call. Earlier this year, the company announced a $2.2 billion deal to buy European payments start-up iZettle which prior to the announcement had been planning on going public on the Nasdaq in Stockholm. PayPal has also made deals to buy Hyperwallet, Jetlore and Simility this year.
Stifel analyst Scott Devitt expects investors to be focused on recently announced acquisitions and integration plans, the Venmo monetization roadmap, the company’s ongoing partnership efforts, progress in emerging geographies, including India and Brazil, and an update on the company’s product development efforts.
On Thursday, the company announced new features and an expansion of its existing partnership with American Express, which is also reporting earnings after the bell. American Express customers will now be able to send money via Venmo or PayPal directly from their Amex mobile app, pay credit card bills with existing Venmo balances, and use Amex Membership Rewards points for PayPal purchases.
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