Wall Street had a quiet day on Wednesday, with the main market benchmarks holding back its gains, even after rising at a feverish pace earlier in the week. The Dow Jones Industrial Average (DJINDICES: ^ DJI) and S&P 500 (SNPINDEX: ^ GSPC) managed to offer modest advances, while the Nasdaq Compound (NASDAQINDEX: ^ IXIC) advanced lower.
|
Index |
Percentage change |
Change of stitch |
|---|---|---|
|
Dow |
+ 0.12% |
+36 |
|
S&P 500 |
+ 0.10% |
+4 |
|
Nasdaq Compound |
(0.02%) |
(two) |
Data source: Yahoo! Finance.
This week is critical for the earnings season, with many top companies reporting their latest results. For PayPal Holdings (NASDAQ: PYPL) and Align Technology (NASDAQ: ALGN), strong results were enough to push its shares up on Wednesday afternoon trading. Let’s take a closer look at what PayPal and Align have to say and what it means for the broader market.
PayPal is in the money
PayPal shares rose between 3% and 4% half an hour after the session started. Fintech’s shares rose just over 1% in the regular session.
PayPal’s results were sensational. The company added 16 million new active accounts in the fourth quarter, an increase of 72% over the previous year’s levels and bringing the 2020 total to 72.7 million. This increased revenue for the quarter by 23% and adjusted profit by 29%. The total volume of payments in the year increased by more than 30%, although travel-related activities almost evaporated during the COVID-19 pandemic.
The future looks bright for PayPal. The company is looking to improve its alternatives to pay later in a response to companies like Affirm participation (NASDAQ: AFRM) and AfterPay, and is also happy with the launch of its digital currency offerings. The company will also push for the cryptocurrency to be a direct source of financing in its base of 29 million merchants.
Some expected cryptocurrency initiatives to play a bigger role in PayPal’s success, but in fact, the strength of their core business is even better news. The company expects to add another 50 million accounts in 2021 and continue to produce solid growth rates. Meanwhile, investors have high hopes that PayPal can continue to profit from the recovery of the global economy and see better days ahead.
Image source: Getty Images.
Alignment makes shareholders smile
Align Technology’s shares were even better, jumping almost 10% after hours. Orthodontic appliance maker Invisalign achieved record financial results in the fourth quarter and the full year in 2020.
Align reported a 28% increase in quarterly revenue compared to the results for the previous year, with the volumes of its transparent aligners increasing 37% to 568,000 boxes. Growth in the adolescent segment continued to outweigh overall gains, with Align obtaining around 30% of its volume of cases from adolescent orthodontic patients. Despite the challenges of the pandemic, total sales for the year increased by 3%.
The US market has been important for Align, but more and more business abroad is playing a more vital role. Align reached the 2 million mark in sales of Invisalign devices to Europe, the Middle East and Africa and sees intensified marketing to international patients throughout 2021.
Much of Align’s success is due to the involvement of social media influencers to promote its use. With a line of new products that will expand its accessible market and having built a connection with many young customers, Align has positioned itself to benefit from favorable trends in the dental industry not only in the immediate future, but in the years to come.