3 Mobile Payments Stocks Worth a Closer Look
Zacks Thematic Screens lets you dive into 30 dynamic investment themes shaping the future. Whether you're interested in cutting-edge technology, renewable energy, or healthcare innovations, our themes help you invest in ideas that matter to you.
For those interested in viewing the Thematic lists, please click here >>> Thematic Screens – Zacks Investment Research.
Let’s take a closer look at the ‘Mobile Payments’ theme and analyze a few stocks that the screen returned, such as Discover Financial Services DFS, American Express AXP, and PayPal PYPL.
Mobile Payments Theme
The rapid shift from cash to digital transactions, driven by a push toward convenience and security, has led to meteoric growth in mobile payments.
Mobile payments are transforming everyday transactions, whether paying for lunch, groceries, or high-end products and services.
The screen encompasses a broad spectrum of innovations, including payment infrastructure, software services, virtual wallets, and smartcards.Please click here for a direct link to the screen >>> Zacks Mobile Payments Thematic Screen
AXP to Report Quarterly Results
Revisions for AXP’s quarter to be reported have been bullish overall since mid-July, with the company expected to post $3.27 per share in earnings. The estimate suggests flat earnings growth year-over-year, but the overall positive revisions trend remains the highlight here.
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The company was firing on all cylinders throughout its latest period, with $16.3 billion in quarterly revenue reflecting an all-time record. And it continues to grow its customer base nicely, with new card acquisitions of 3.3 million and double-digit growth in fee revenues also reflecting notable highlights.
AXP’s top line has continued to be impressive post-pandemic, as we can see in the quarterly chart below.
Image Source: Zacks Investment Research
Key metrics to watch for the upcoming release include New Card Acquisitions and Fee Revenues. Shares are modestly expensive relative to historical levels heading into the print, with the current 19.4X forward 12-month earnings multiple well above the 16.1X five-year median.
Still, the current 1.4X PEG ratio reflects a somewhat fair price for the forecasted growth.
DFS Posts Strong Results
Concerning headline results in its recent release, DFS exceeded both consensus EPS and sales expectations easily, reflecting growth rates of 70% and 20%, respectively. The initial reaction to the results was somewhat muted, though bullish action followed on the next trading day.
DFS shares are trading at all-time highs thanks to the release, undoubtedly a bullish sign. Up nearly 40% in 2024, shares have delivered a notably strong performance relative to the S&P 500.
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Modest loan growth was a tailwind for the company throughout the period, which reflects overall positivity surrounding the economic outlook. Total loans totaled $127 billion, 4% higher than the year-ago period and paired with a 10% year-over-year change in Personal Loans. The company also saw a slight credit improvement, again reflective of a positive environment.
PayPal Raises Guidance
PayPal is one of the largest online payment solutions providers, a pioneer in the space overall. The company’s outlook has improved nicely across the board, a bullish signal.
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Shares have delivered an excellent bounce-back performance in 2024 after a long period of adverse price action, up 30% and benefiting in a big way from its last set of quarterly results.
The company raised its 2024 outlook and increased its share repurchases, explaining the bullish reaction post-earnings. The increased buybacks could help put in a ‘floor’ for shares, and the company has already been aggressively buying back its shares over recent years.
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The positive revisions paint a positive picture for shares in the near term, with its current valuation also supportive of gains. Shares are currently trading at a 16.9X forward 12-month earnings multiple, nowhere near the 28.5X five-year median and a fraction of 84.9X five-year highs.
The PEG ratio works out to 1.4X, again below the five-year median and five-year highs by fair margins.
Image Source: Zacks Investment Research
Bottom Line
Zacks Thematic Screens lets you dive into 30 dynamic investment themes shaping the future. Whether you're interested in cutting-edge technology, renewable energy, or healthcare innovations, our themes help you invest in ideas that matter to you.
Upon running the Zacks Mobile Payments Thematic screen, all three stocks above – Discover Financial Services DFS, American Express AXP, and PayPal PYPL – were returned.
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Discover Financial Services (DFS) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report