What Made PayPal’s (PYPL, $90.69) Shares Surge More than 24% in 2018?
PayPal Holdings witnessed impressive growth in its user base in 2018, with a reach of 254 million active accounts as reported in its 2018 third quarter earnings.
What enabled this compelling growth?
Paypal's increasing customer base indicates a growing network effect: the more value it has for existing customers, the more new users join in. The more customers use PayPal, the more merchants will feel compelled to accept this as a mode of payment; as more merchants accept this as a mode of payment, the more customers will use this, and in this way the cycle goes on. This rising network effect is evident in the company's third quarter earnings report, in which the average account that had used PayPal is 36.5 times over the last year, a 9.5% year-over-year increase.
This rapid growth in PayPal’s users and sales reflect the company’s unique positioning in digital payments. For example, Apple also has digital wallet called Apple Pay. But if someone wants to direct funds to a friend’s account, that person must also be an Apple user. These limiting factors, also found in Samsung Pay, Alphabet’s Google Pay and Amazon.com’s Amazon Pay, are eliminated by PayPal helped it increase its customer base.
Paypal's third quarter earnings report saw its revenue grow to $3.68 billion, a 14% year-over-year increase, and adjusted earnings per share (EPS) rose to $0.58, a 26% year-over-year increase. PayPal is now set to finish the year with adjusted EPS in a range of $2.38 to $2.40, which would give it an adjusted P/E ratio of 38.1.
PYPL in downward trend: 10-day moving average broke below 50-day moving average on September 10, 2026
The 10-day moving average for PYPL crossed bearishly below the 50-day moving average on September 10, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 11 of 13 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 85%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on August 28, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on PYPL as a result. In 71 of 90 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 79%.
PYPL moved below its 50-day moving average on September 08, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PYPL declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 75%.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where PYPL's RSI Indicator exited the oversold zone, 31 of 47 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 66%.
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 2 days, which means it's wise to expect a price bounce in the near future.
The 50-day moving average for PYPL moved above the 200-day moving average on August 20, 2026. This could be a long-term bullish signal for the stock as the stock shifts to an upward trend.
Following a +2.97% 3-day Advance, the price is estimated to grow further. Considering data from situations where PYPL advanced for three days, in 184 of 290 cases, the price rose further within the following month. The odds of a continued upward trend are 63%.
PYPL may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In 138 of 190 cases where PYPL Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 73%.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 39 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 47 (best 1 - 100 worst), indicating steady price growth. PYPL’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 61 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.319) is normal, around the industry mean (4.234). P/E Ratio (10.155) is within average values for comparable stocks, (15.404). Projected Growth (PEG Ratio) (0.948) is also within normal values, averaging (2.276). Dividend Yield (0.010) settles around the average of (0.081) among similar stocks. P/S Ratio (1.455) is also within normal values, averaging (5.929).
The Tickeron PE Growth Rating for this company is 77 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. PYPL’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 76, placing this stock worse than average.
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General Information
a provider of digital and mobile payments on behalf of consumers and merchants
Industry SavingsBanks
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