PayPal Holdings reported robust first-quarter earnings and completed significant share repurchase activities. This has been accompanied by a notable collaboration with Coinbase to promote the use of its stablecoin, potentially supporting the company's future growth. These positive developments seem to align with broader market gains, as the market itself rose 7.1% over the same period. Consequently, PayPal's 7.71% increase last week likely added weight to this general upward trend in equities. While the overall market mood was positive, evidenced by strong earnings across various sectors, PayPal's specific actions certainly bolstered its performance.

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The recent collaboration between PayPal Holdings and Coinbase to promote stablecoin adoption could bolster PayPal's projected revenue growth and earnings. As PayPal enhances its digital payment ecosystem, this partnership may drive higher transaction volumes and improve conversion rates, crucial for revenue growth. The focus on innovations in branded checkout and Venmo monetization aligns well with the company's strategic initiatives to elevate user engagement and expand its market presence.

Over the longer term, PayPal's total shareholder return, including share price and dividends, showed a 3.08% decline over the last year. Comparatively, the broader market posted a 7.7% gain during the same period, highlighting underperformance relative to market peers. In the context of the US Diversified Financial industry, PayPal also underperformed, as the industry saw a 20.8% increase over the past year.

Expected revenue growth from increased Venmo usage and branded checkout innovations could support analysts' forecasts of $5.3 billion in earnings by 2028. However, these forecasts depend on market penetration, economic conditions, and evolving interest rates. With a current share price of US$61.42 and an analyst consensus price target of US$85.24, PayPal's stock still trades at a notable discount. Investors must weigh these forecasts against ongoing risks and market dynamics.

Gain insights into PayPal Holdings' outlook and expected performance with our report on the company's earnings estimates.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NasdaqGS:PYPL.

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