Mobile Payment Stocks: PayPal Helps eBay Beat Earnings Estimates

Online retailer eBay (NAS: EBAY) beat analyst expectations on Wednesday after reporting sales and profit above expectations led by growth in its PayPal online payments business.

Shares rose more than 6.6% in after-hours trading after falling 0.58% on Wednesday.

First-quarter revenue increased 29% to $3.28 billion. That beat Bloomberg's average analyst estimate of $3.2 billion. "Profit excluding some items was" $0.55 per share, "compared with the average" $0.52 expectation.


PayPal's revenue increased 32% and volume increased 24% in the first quarter. It accounted for 43% of last year's sales. eBay says it is expanding beyond its online auction site into mobile shopping on smartphones and tablets. The company projects mobile-payment volume will increase 75% and add $7 billion in revenue.

"We see enormous opportunity for PayPal, online, on mobile devices, and increasingly in the offline environment as well," eBay CEO John Donahoe said in a conference call with analysts.

Business section: Investing ideas
Is mobile payment the next big market to take off?

For a look into the market, we created a list of companies with exposure to the mobile payment industry. Think it will help to notably boost revenues? (Click here to access free, interactive tools to analyze these ideas.)

1. Amazon.com (NAS: AMZN) : Operates as an online retailer in North America and internationally. The company has a market cap of $86.95 billion. The stock has gained 7.14% over the last year.

2. American Express: Provides charge and credit payment card products, and travel-related services worldwide. The company has a market cap of $67.7 billion. The stock has gained 27.9% over the last year.

3. Discover Financial Services: Operates as a credit card issuer and electronic payment services company primarily in the United States. The company has a market cap of $17.31 billion. It might be undervalued at current levels, with a PEG ratio at 0.79, and P/FCF ratio at 5.61. The stock has gained 38.58% over the last year.

4. eBay: Provides online marketplaces for the sale of goods and services, as well as other online commerce, platforms, and online payment solutions to individuals and businesses in the United States and internationally. The company has a market cap of $46.28 billion. The stock has gained 15.15% over the last year.

5. MasterCard (NYS: MA) : Provides transaction processing and related services to customers principally in support of their credit, deposit access, electronic cash and automated teller machine payment card programs, as well as traveler's check programs. The company has a market cap of $55.25 billion. The stock has gained 65.1% over the last year.

6. VeriFone Systems (NYS: PAY) : Designs, markets, and services electronic payment solutions that enable secure electronic payments among consumers, merchants, and financial institutions worldwide. The company has a market cap of $5.79B. The stock is a short squeeze candidate, with a short float at 10.54% (equivalent to 5.1 days of average volume). The stock has gained 4.15% over the last year.

7. Visa (NYS: V) : Operates retail electronic payments network worldwide. The company has a market cap of $99.04 billion. It also has a relatively low correlation to the market (beta of 0.75), which may be appealing to risk averse investors. The stock has gained 62.18% over the last year.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


 

At the time this article was published Kapitall's Rebecca Lipman does not own any of the shares mentioned above. Data sourced from Finviz. The Motley Fool owns shares of Amazon.com and MasterCard. Motley Fool newsletter services have recommended buying shares of Visa, eBay, and Amazon.com. Motley Fool newsletter services have also recommended writing puts on eBay and creating a write covered strangle position in American Express. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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Joanna Freed

How to Make It in Mobile Commerce: Lessons from the Front Line
http://pymnts.com/briefing-room/ebooks/How-to-Make-It-in-Mobile-Commerce-Lessons-from-the-Front-Line/

April 20 2012 at 12:50 PM Report abuse rate up rate down Reply