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 will help you invest in ideas that matter to you.
For those interested in viewing the thematic lists, click here >>> Thematic Screens – Zacks Investment Research.
Let’s take a closer look at the ‘Mobile Payments’ theme and analyze some of the stocks that appeared on the screen, such as Discover Financial Services DFS, American Express AXP and PayPal PYPL.
Mobile payment theme
The rapid shift from cash to digital transactions, driven by a drive for convenience and security, has led to rapid growth in mobile payments.
Mobile payments are transforming everyday transactions, whether it’s for lunch, grocery shopping or high-value products and services.
The display covers a broad spectrum of innovations, including payment infrastructure, software services, virtual wallets and smart cards. Click here for a direct link to the >>>Zacks Mobile Payments Thematic Screen
AXP reports quarterly results
AXP’s upcoming quarter revisions have been broadly bullish since mid-July, with the company expected to post earnings of $3.27 per share. The estimate points to flat year-over-year earnings growth, but the overall positive trend in revisions remains the highlight here.
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The company has been running at full speed recently, with a quarterly turnover of $16.3 billion, a record. And it continues to grow its customer base nicely, with new card acquisitions worth 3.3 million and double-digit fee revenue growth also reflecting notable highlights.
AXP’s revenue remained impressive even after the pandemic, as we can see in the quarterly chart below.
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Key metrics to keep an eye on for the upcoming release include new ticket purchases and fee income. Shares are modestly expensive relative to historical levels heading into print, with the current 19.4x trailing-12-month earnings margin well above the 16.1x five-year median.
Still, the current PEG ratio of 1.4x reflects a somewhat fair price for the forecast growth.
DFS is achieving strong results
In terms of key results in its recent release, DFS easily exceeded both consensus EPS and revenue expectations, with growth rates of 70% and 20%, respectively. Initial reaction to the results was somewhat muted, although bullish action followed on the next trading day.
Thanks to the release, DFS stock is trading at record highs, which is undoubtedly a bullish sign. With a nearly 40% rise through 2024, stocks have delivered a remarkably strong performance versus the S&P 500.
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Modest loan growth has been a tailwind for the company throughout the period, reflecting the general positivity around the economic outlook. Total loans reached $127 billion, up 4% from the same period last year and accompanied by a 10% year-over-year change in personal loans. The company also saw slight credit improvement, again reflecting a positive environment.
PayPal increases guidelines
PayPal is one of the largest providers of online payment solutions and a pioneer in this field. The company’s prospects have improved quite a bit across the board, a bullish signal.
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The shares have put in an excellent recovery performance in 2024 after a long period of adverse price movements, rising 30%, benefiting greatly from the latest set of quarterly results.
The company raised its 2024 outlook and increased share buybacks, which explained the bullish reaction after the earnings report. The increased buybacks could help create a “floor” for shares, and the company has already been aggressively buying back its shares in recent years.
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The positive revisions paint a positive picture for the stock in the near term, with the current valuation also supporting earnings. The stock currently trades at a trailing twelve-month earnings multiple of 16.9x, nowhere near the five-year median of 28.5x and a fraction of the five-year high of 84.9x.
The PEG ratio comes in at 1.4x, again below the five-year median and five-year highs, with reasonable margins.
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In short
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 will help you invest in ideas that matter to you.
When 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
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