Ever since PayPal (NASDAQ:PYPL) split off from eBay (NASDAQ:EBAY), I’ve been very optimistic toward the freshly minted company. In my view, PayPal stock represents the future of financial and business transactions. The rise of blockchain-based cryptocurrencies firmly solidifies my argument.

The other factor favoring PYPL stock is that the markets have fallen in love with its potential. While the early goings featured incredibly choppy and nerve-wracking trading, the digital-payments platform enjoyed a banner year in 2017. From an opening price of $40.29, PYPL closed out last year at $73.62.

But like anything else, what goes up must come down. PayPal stock still managed to defy gravity up until late September. Unfortunately, October has turned out to be a frightful month for the payments processor. Further, the broader market shakedown really did a number on the company.

As a result, sentiment was poor heading into the third quarter PayPal earnings report. Indeed, PYPL stock dropped more than 3% of market value right before the financial disclosure.

Still, astute investors deciphered that the bears were overplaying their hand. For one thing, Zacks maintained a “buy” rating on shares just prior to the PayPal earnings report. More importantly, we previously saw a mismatch between the fundamentals and technical action for PayPal stock.

In Q2 2018, the company produced a thorough beat against both profitability and revenue expectations. Moreover, the company grew new active accounts by an impressive 7.7 million users. Payment volume jumped 29% year-over-year to $139 billion. Finally, PayPal users increased the number of their annual transactions.

Yet a lowered revenue guidance for Q3, and a $10 billion buyback authorization spooked investors, who interpreted these signs as evidence of fading growth opportunities. Subsequently, PayPal stock took a hit.

A repeat performance, however, does not appear likely.

PayPal Earnings Delivers on All Fronts

Doubters certainly had momentum on their side. Just prior to the Q3 disclosure, PYPL stock was staring at a 12% loss for this month. However, management produced numbers that just can’t be denied. Wall Street consensus for earnings per share was 54 cents among 43 covering analysts. Individual estimates ranged from 52 cents to 57 cents. The actuals came in a penny higher than the most optimistic forecast, producing a 7.2% positive surprise.

The earnings haul for PayPal stock was especially impressive against the prior year’s result. In Q3 2017, the company produced an EPS of 46 cents, which translates to 26% YOY growth this time around. This tally also keeps alive the trend of double-digit growth in Q3 since 2015.

For the revenue picture, the consensus called for $3.66 billion. Analyst forecasts ranged tightly between $3.6 billion to $3.7 billion. PayPal produced a slight beat, driving in $3.68 billion. However, this figure did beat the upper range of Q2’s sales guidance. Plus, in the year-ago quarter, the payment company rang up $3.24 billion, or a 13.6% YOY lift.

Despite these exciting figures, the biggest enthusiasm was reserved for digital wallet Venmo. In light of competition from Square (NYSE:SQ) and the rising fintech industry, Venmo failed to prove itself. If there was one glaring weakness for PayPal stock, it was the underlying company’s lack of traction in mobile-payment services.

Those doubts can be laid to rest. Payment volume for the app skyrocketed 78% YOY, bringing home $17 billion. CEO Daniel Schulman was especially pleased with the “strong overall momentum surrounding Venmo,” who eagerly looks forward to cashing in on the company’s monetization efforts.

The markets decisively interpreted the positive results, with PYPL stock jumping nearly 8% in afterhours trading.

Across the Board Enthusiasm for PayPal stock

As I mentioned earlier, PayPal stock had previously suffered from a disconnect between the fundamentals and technicals. Moving ahead, we should see the markets respond in a more logical manner.

That’s because management made the bears’ job difficult. Perhaps the one area for nitpicking is PayPal’s total payment volume, which was “only” $143 billion. This figure missed the consensus target of $145 billion.

However, this represents a 25% gain from the year-ago level. Additionally, mobile payments saw significant upside, which contributed 40% of the company’s total volume. Just as importantly, PayPal increased its active-user accounts to 254 million. This was on the back of a record 9.1 million accounts added in Q3.

As if these factors weren’t enough, management also raised Q4 EPS guidance to a range between 65 cents to 67 cents. For everyone else, the message from this PayPal earnings report was clear: doubt PYPL stock at your own risk!

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.