Growth Pick - Feb 2025

We are adding this new company to our portfolio.

When you think of the digital payments landscape, chances are this company pops into your mind. It's not just a company; it’s a cornerstone of how we transact in an increasingly interconnected world. With over 420 million active accounts and a staggering $1.53 trillion in total payment volume processed in 2023, this company is a juggernaut that has evolved well beyond its early roots. But what makes it tick? Why is it poised for even greater success despite fierce competition and evolving market dynamics? Let’s dive into the financial highlights, its compelling value proposition, the risks on its radar, and how it stacks up against competitors.

Financial Highlights

Numbers don’t lie, and its latest metrics tell a story of resilience, growth, and transformation. In Q3 2024 alone, this fintech giant reported a 9% growth in total payment volume, reaching an impressive $422.6 billion. Revenue climbed 6%, while non-GAAP EPS soared by an eye-popping 22% year-over-year. These aren’t just numbers; they’re milestones that signify its ability to adapt to changing consumer behaviors and capitalize on emerging trends.

Let’s break it down further:

• It generated $1.4 billion in free cash flow in Q3 alone, contributing to a robust $7.67 billion in cash from operations. This financial muscle allows the company to reinvest in innovation, partnerships, and customer-centric features. For instance, its branded checkout performance monthly usage surge (up 20%) have been pivotal drivers of growth.

• Its profitability metrics also shine. With a return on equity (ROE) of 22%, it crushes the Financials sector median of 10.2%. And despite the competitive landscape, its forward EPS growth of 31% is a staggering 600% above the sector median. Imagine a relay race where this company isn’t just leading but lapping the competition.