GET DAILY SIGNALSWhat 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.
Momentum Indicator for PYPL turns positive, indicating new upward trend
PYPL saw its Momentum Indicator move above the 0 level on October 30, 2026. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 93 similar instances where the indicator turned positive. In 62 of the 93 cases, the stock moved higher in the following days. The odds of a move higher are at 67%.
Technical Analysis (Indicators)
Bullish Trend Analysis
PYPL moved above its 50-day moving average on October 27, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for PYPL crossed bullishly above the 50-day moving average on October 20, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 9 of 14 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 64%.
Following a +1.85% 3-day Advance, the price is estimated to grow further. Considering data from situations where PYPL advanced for three days, in 190 of 292 cases, the price rose further within the following month. The odds of a continued upward trend are 65%.
The Aroon Indicator entered an Uptrend today. In 138 of 212 cases where PYPL Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 65%.
Bearish Trend Analysis
The 10-day RSI Indicator for PYPL moved out of overbought territory on November 05, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 31 similar instances where the indicator moved out of overbought territory. In 22 of the 31 cases, the stock moved lower in the following days. This puts the odds of a move lower at 71%.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 5 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
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 73%.
PYPL broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
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 43 (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 Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
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 (2.557) is normal, around the industry mean (3.902). P/E Ratio (11.114) is within average values for comparable stocks, (6.401). Projected Growth (PEG Ratio) (0.958) is also within normal values, averaging (3.918). Dividend Yield (0.009) settles around the average of (0.189) among similar stocks. P/S Ratio (1.428) is also within normal values, averaging (5.901).
The Tickeron PE Growth Rating for this company is 67 (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 80, 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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