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Summary
- PayPal’s stock has bounced back by an astonishing 150 per cent increase since the pandemic-led crash on March 24.
- PayPal added 21.3 million new accounts in Q2 FY20, a 137 per cent YoY growth.
- Nuvei’s stock has swelled nearly 22 per cent in the last one month.
- GoldMoney’s stock has increased by nearly 31.5 per cent year-to-date (YTD).
Digital payment platforms were already on a growth spree before the pandemic hit the Canadian markets. The digital transactions have seen an uptick as the COVID-19 transformed the way we operate financially. In the wake of the ongoing coronavirus pandemic, Financial Technology (FinTech) and virtual currency companies have witnessed a sudden growth spurt.
According to the National Crowdfunding & Fintech Association of Canada (NCFA Canada) report, over 96 per cent of enterprises surveyed stated that digital payment is a viable option for financial institutions with the coronavirus forcing humans to maintain social distancing.
The digital payment giant PayPal Holdings, Inc. (NASDAQ:PYPL, PYPL:US) has announced that it will allow customers to hold bitcoin and other virtual currencies on its platform and shop with cryptocurrencies. The payment app hosts 26 million retailers on its network. This initiative may push the global use of virtual currencies and initiate central banks and other companies to use digital coins, Paypal President and Chief Executive Dan Schulman stated.
Following PayPal's announcement, crypto, digital payment, and virtual coin companies started trending in Canadian markets. Let us look at three fintech stocks PayPal Holdings, Inc. (NASDAQ:PYPL), Nuvei Corp (TSX:NVEI), and GoldMoney Inc (TSX:XAU).
PayPal Holdings, Inc. (NASDAQ:PYPL, PYPL:US)
Current Stock Price: 213.07
In addition to its cryptocurrency services, the California-based company has been exploring the potential of digital currencies through collaborations with the central banks regulated cryptocurrency platforms across the globe. PayPal had 346 million active users at the end of Q2 FY20. The company is reportedly exploring the potential of next-generation technologies to enhance its financial services and has proposed to work in with payment watchdogs and central banks for the same. The company also holds Xoom, a global money transfer business, and Venmo, an in-person payment platform.
The fintech company has also been granted an unprecedented conditional Bitlicense by the New York State Department of Financial Services (NYDFS).
PayPal Stock Performance
PayPal share price has climbed by nearly 85 per cent in the last six months. The stock has bounced back with an astonishing 150 per cent increase since the pandemic-led crash on March 24. Moreover, the company scrips reported a 97 per cent growth year-to-date (YTD). Its current market capitalization stands at approximately US$ 250 billion.
PayPal has not paid any dividend to its shareholders t0 date. The company’s earnings per share (EPS) is US$ 2.18. Its price-to-book ratio is 14.176. PayPal’s return on equity (ROE) is 15.29 per cent. Its price-to-cashflow ratio is 38.40, and the earning-to-price ratio is 92.60, as per TMX data.
PayPal Financial Performance
PayPal’s reported its earnings for the second quarter of 2020. Total revenues stood at US$5.26 billion, an increase of 25 percent year-over-year (YoY). It was the first time that the company posted quarterly revenue above US$5 billion. PayPal added 21.3 million new accounts in Q2 FY20, a 137 per cent YoY growth.
The posted payment volume of US$222 billion, a 29 per cent spot YoY growth, including ~60 per cent of YoY decline in travel and events verticals. Its free cash flow was US$ 2.2 billion for the second quarter ended on 30 June 2020, a 112 per cent growth YoY.
Nuvei Corporation (TSX:NVEI)
Current Stock Price: C$ 54.99
Nuvei’s raised US$ 833 million in the largest tech IPO on the Toronto Stock Exchange (TSX) last month. The fintech stock has been performing well on the TSX since then, swelling nearly 22 per cent in the last one month. Its current market cap stands at C$2.15 billion.
The Montreal-based tech company offers payment technology solutions to merchants and partners in North America, Europe, Asia Pacific, and Latin America. Nuvei provides mobile, online, and in-store payments. The company earns its revenue via subscriptions, sales, and transaction fees.
Nuvei's YTD Stock Performance Chart (Source: EODHD/Others, Thomson Reuters)
The fintech company has also started providing payment services to e-sport operators and sports gambling companies to target users aged over 21. As Canada legalized sports betting, digital payment companies are in a race to purchase more gaming payment gateways.
GoldMoney Inc. (TSX:XUA)
Current Stock Price: 2.46
Toronto-based GoldMoney is a digital gold-based financial services platform. The company provides personal, corporate, and wealth account. It has three domains – Goldmoney.com and SchiffGold and Lends and Borrow Trust. Goldmoney.com generates most of the revenue.
GoldMoney Stock Performance
GoldMoney’s current market capitalization is almost C$ 192 million. The stock has rebounded 67.4 per cent since the pandemic-led crash on March 13. The stock has increased by nearly 31.5 per cent year-to-date (YTD). The company paid a dividend of C$ 0.004 in the first quarter of the fiscal year 2020-21. Its dividend yield is 0.619 per cent and the price-to-book ratio is 1.038, as per TMX data.
GoldMoney Financial Highlights
GoldMoney’s net IFRS revenue for the first quarter FY21 was C$ 173.5 million – a stunning rise of 193 per cent YoY. The company posted a gross profit of C$ 10.6 million for Q1 FY21, up 159 per cent from C$ 4.1 million in Q1 FY20.
Goldmoney.com Group’s customer assets increased by 10 per cent quarter-on-quarter to C$ 2.29 billion in Q1 2021. Its client asset worth stood at approximately C$ 2.8 billion. The company’s corporate precious metal position is almost C$ 45 million.
