The world’s most valuable online retail company, Amazon, is worth a whopping $1.5 trillion – this valuation is bigger than Africa’s top ten banks capitalization value combined.
Still, the Nasdaq traded stock is red hot relatively, taking into account the stock is up 77% YTD, and the company recently announced the launch of an online pharmacy, meaning it has ventured into a juicy ecosystem that considerably offers better margins when compared to generic goods like wears, toys.
Such a move signals an overnight paradigm shift for the online retail ecosystem, amid fears from its rivals that the online retail juggernaut has a massive amount of cash to push forward such a project.
A recent report from Deloitte research anticipates e-commerce sales will climb between 25% and 35% year over year during the holiday shopping season.
Global investors have relatively increased their buying pressure on the Stock, on the bias that the outlook for global e-commerce is much brighter amid the COVID-19 pandemic, forcing more individuals globally to shop online.
Its latest earning results show its fundamentals remain upbeat;
- Operating cash flow increased 56% to $55.3 billion for the trailing twelve months, compared with $35.3 billion for the trailing twelve months ended September 30, 2019.
- Free cash flow increased to $29.5 billion for the trailing twelve months, compared with $23.5 billion for the trailing twelve months ended September 30, 2019.
- Net sales increased by 37% to $96.1 billion in the third quarter, compared with $70.0 billion in third-quarter 2019.
- Excluding the $691 million favorable impacts from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 36% compared with third-quarter 2019.
- Operating income increased to $6.2 billion in the third quarter, compared with operating income of $3.2 billion in third-quarter 2019.
- Net income increased to $6.3 billion in the third quarter, or $12.37 per diluted share, compared with net income of $2.1 billion, or $4.23 per diluted share, in the third quarter of 2019.
It’s not surprising its founder Jeff Bezos is reportedly worth $183 billion, according to the Bloomberg Billionaires Index.
Although, since the amazing online retail stock hit $3,550 per share in early September, it dropped about 12.7% from the peak, as it presently trades around $3,099.
Nairametrics anticipates its cloud investments will pay off in the mid-term, taking into consideration it’s the world-leading market shareholder in cloud computing, coupled with the fact it offers the company incredibly high-profit margins and not forgetting the pending holiday season coming to play.
PayPal post its strongest Q1, with net profits of $1.10 billion
PayPal currently has 392 million active accounts with net profit in Q1 rising to $1.10 billion.
The fintech juggernaut posted impressive growth in its revenues in Q1 bolstered by the growing usage of the digital economy. PayPal stated it had revenues of $6.03 billion in Q1 and earnings per share of $1.22, which outperformed market analysts’ forecast of $1.01.
Altogether PayPal currently has 392 million active accounts with net profit in Q1 rising to $1.10 billion from $84 million a year earlier.
The company is riding high taking into consideration that online shopping hit a record high spurred by COVID-19, though some market pundits argue that such could change as the pandemic eased. Still, PayPal’s stellar performance does not look likely to succumb to that prediction anytime soon.
Highlights of PayPal Q1 earning results
- Earnings per share: $1.22, adjusted, vs. $1.01 per share expected in a Refinitiv survey of analysts.
- Revenue: $6.03 billion vs. $5.90 billion expected by Refinitiv.
- Total payment volume: $285 billion vs. $265 billion expected in a FactSet survey.
“Our strong first-quarter results demonstrate sustained momentum in our business as the world shifts into the digital economy,” said CEO Dan Schulman in a statement.
The company’s impressive performance was also reflected in the addition of 14.5 million new active accounts, with 1.5 million new merchant accounts included, bringing the total merchant accounts to 31 million globally.
“Our record-breaking first quarter results underscore the ongoing strength, diversification, and relevance of our scaled, two-sided, global payments platform. We are raising our FY’21 guidance based on these strong results.” John Rainey the CFO added.
Consequently, Paypal has upgraded its service offerings with the option of the ability for splitting up purchases and paying them off for a period of time as well as the ability to purchase and sell, Bitcoin, Ethereum, Litecoin, Bitcoin Cash.
Recent price actions reveal PayPal rose as high as $259.55 in extended New York trading after the announcement was made thereby posting gains of 4.65%.
Economic summary: Crypto, Inflation & SIM Card Policies for the past week
Getting up to an eventful week ahead, these are the things you should know.
Last week was interesting and we tracked some notable events in the economy and markets that would likely have an impact on your money this week.
The National Bureau of Statistics released its monthly inflation figures and it is pretty clear that inflation in Nigeria is going only one way — up. Inflation rate stands at 18.17% for the month of March, rising from 17.33% in February. Food inflation currently stands at 22.95%. The macro environment looks particularly gloomy for the average man with rising inflation eroding purchasing power.
What we find the most significant is how this will affect investors. With inflation heading towards 20%, it is going to be increasingly difficult for fund managers and investors to earn decent returns on their investments. A few weeks back, it was stated that the CBN had no real concern with inflation because it was caused by other related factors. We believe it is the right time for the Central Bank to step in by raising interest rates and mopping the excess liquidity in the economy.
The Central Bank last week announced that it was including wheat and sugar on the foreign exchange restriction list. Recall that the CBN had listed 41 items placed on the FX restriction list in 2015, then added maize to the list in 2020.
With existing players like Dangote Sugar, the CBN believes that Nigeria has enough or should have enough capacity to meet local demand.
Last week, The Debt Management Office (DMO) announced the offer of N150 billion bonds for subscription by auction in the month of April on behalf of the Federal Government. We reported two weeks ago that bond prices were falling as the yield was rising. As at April, 15th, the S&P FMDQ Nigerian Sovereign Bond Index was -22.07% YTD.
Nigerian investors can still capitalize on decent yields in the bond market. The total subscription received from investors for the bonds was N333.48bn comprising N65.25bn for 16.2884% FGN March 2027 bonds; N110.19bn for 12.5% FGN March 2035 bonds; and N158.04bn for 9.8% FGN July 2045 bonds.
Cryptocurrency and volatility
The cryptocurrency market had a bullish week till yesterday when sell-offs in the market ensured that coins like Ethereum dropped by about 21.46%. Olumide Adesina, a market analyst and cryptocurrency expert, called it a “bloody Sunday.” In a Twitter Spaces conversation with Ugodre Obi-Chukwu on Saturday, he discussed how the market was overheating and the bullish run was unsustainable. Despite the losses yesterday, there is still a lot of upside on cryptocurrencies and many experts remain bullish long-term.
For whoever is willing to invest in this asset class, the rule of thumb is to only invest money you can part with and do your research.
Other related news:
FG lifts suspension of issuance of new sim cards
The FG lifted its ban on new sim cards for telco players last week. This had previously been halted by the Federal Ministry of Communications and Digital Economy last December. Without a doubt, this is good news for stakeholders in the industry as analysts had predicted that the ban would affect the growth of the sector.
From the government’s perspective, it begs the question, what was the need to issue a ban on new sim cards in the first place?
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Okomu Oil proposes dividend worth N6.7 billion for shareholders.
- Ardova Plc confirms appointment of Oladeinde Nelson-Cole as secretary.
- Cadbury Nigeria Plc set to hold 56th Annual General Meeting (AGM) on June 16.
- FCMB Group Plc appoints Muibat Ijaiya as Director.
- Afromedia Plc reports a loss after tax of N27.3 million in Q1 2021.