With barely a week left before the 1Q19 earnings cycle begins, our recommendations are gearing up for their quarterly moment of truth. Those that stumbled in recent quarters need to demonstrate that they've turned the trend around. And our champions need to keep the good news flowing.
The last pre-earnings week is off to a calm, quiet and relatively confident start. We're a long way from the avalanche of warnings that shocked the 3Q18 season six months ago or the guarded relief that gave the BMR universe the power to rally 13% in the 4Q18 cycle back in January.
As those comparisons recede into the past, we're looking for something in between this time around. The numbers won't look great on an absolute basis without the easy boost of one-time tax reform. Several prominent companies have already admitted that the quarter wasn't great. However, our most reliable recommendations will be the best barometer of all of what's really going on in Corporate America. That means PayPal (PYPL: $107, up 1% yesterday to a new record), which reports on April 24, barely 9 days after the season starts Monday morning with the big Banks.
PayPal is an important bellwether for us because it's so reliable. Revenue generally climbs around 17% a year, quarter after quarter. Between that and emerging efficiencies of scale, earnings have been on a 20% growth ramp for years and we see no reason to doubt that the trend won't continue for the foreseeable future. Occasionally a particular quarter comes in better than usual and the stock surges. More often, management hits its guidance and confirms that we can expect more of the same.
Repeat every three months and it's no wonder that PayPal has soared 240% since we added it to the Stocks For Success portfolio in 2016, barely three years ago. The 20% earnings growth ramp has translated into the stock hitting a 50% annual compound return, which is fantastic.
This time around, expectations are on the low side. Given all the global economic cross currents we saw last quarter, we'd be content with 12% revenue growth feeding 16% to the bottom line, for absolute numbers of $4.1 billion and $800 million, respectively. That's enough to support PayPal at a 36X earnings multiple now and a year from now the fundamental trend can easily extend the current record-breaking run beyond $125.
Since the stock is now above our $106 Target, we're raising our own sights to that $125 level now. We wouldn't sell PayPal as long as the trend continues. And that's what the conference call will give us on April 24th: Clarity on not just the trailing quarter, but management's sense of where the numbers will take the company, the stock and its shareholders over the coming year.