Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at PayPal (NASDAQ: PYPL) and the best and worst performers in the diversified financial services industry.
Diversified financial services encompass specialized offerings outside traditional categories. These firms benefit from identifying niche market opportunities, developing tailored financial products, and often facing less direct competition. Challenges include scale limitations, regulatory classification uncertainties, and the need to continuously innovate to maintain market differentiation against larger competitors expanding their offerings.
The 10 diversified financial services stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 3% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 1.2% on average since the latest earnings results.
PayPal (NASDAQ: PYPL)
Originally spun off from eBay in 2015 after being acquired by the auction giant in 2002, PayPal (NASDAQ: PYPL) operates a global digital payments platform that enables consumers and merchants to send, receive, and process payments online and in person.
PayPal reported revenues of $8.42 billion, up 7.3% year on year. This print exceeded analysts’ expectations by 2.2%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ transaction volumes estimates.
Unsurprisingly, the stock is down 4.5% since reporting and currently trades at $67.07.
Is now the time to buy PayPal? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Paymentus (NYSE: PAY)
Founded in 2004 to simplify the complex world of bill payments, Paymentus (NYSE: PAY) provides a cloud-based platform that helps utilities, municipalities, and service providers automate billing and payment processes.
Paymentus reported revenues of $310.7 million, up 34.2% year on year, outperforming analysts’ expectations by 10.7%. The business had a stunning quarter with a solid beat of analysts’ revenue estimates and an impressive beat of analysts’ EBITDA estimates.
Paymentus delivered the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 32.9% since reporting. It currently trades at $37.94.
Is now the time to buy Paymentus? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: NCR Atleos (NYSE: NATL)
Spun off from NCR Voyix in 2023 to focus exclusively on self-service banking technology, NCR Atleos (NYSE: NATL) provides self-directed banking solutions including ATM and interactive teller machine technology, software, services, and a surcharge-free ATM network for financial institutions and retailers.
NCR Atleos reported revenues of $1.12 billion, up 4.5% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 6% since the results and currently trades at $35.62.
Read our full analysis of NCR Atleos’s results here.
Payoneer (NASDAQ: PAYO)
Founded during the early days of global e-commerce in 2005 to solve international payment challenges, Payoneer (NASDAQ: PAYO) provides financial technology services that enable small and medium-sized businesses to send and receive payments globally across borders.
Payoneer reported revenues of $270.9 million, up 9.1% year on year. This print beat analysts’ expectations by 2.9%. Taking a step back, it was a mixed quarter as it also produced a solid beat of analysts’ yield estimates but EPS in line with analysts’ estimates.
The stock is down 6.7% since reporting and currently trades at $5.40.
Read our full, actionable report on Payoneer here, it’s free for active Edge members.
NerdWallet (NASDAQ: NRDS)
Born from founder Tim Chen's frustration with the lack of transparent credit card information when helping his sister in 2009, NerdWallet (NASDAQ: NRDS) is a digital platform that provides financial guidance to help consumers and small businesses make smarter decisions about credit cards, loans, insurance, and other financial products.
NerdWallet reported revenues of $215.1 million, up 12.4% year on year. This result surpassed analysts’ expectations by 11.3%. It was an exceptional quarter as it also recorded a solid beat of analysts’ revenue estimates and an impressive beat of analysts’ EBITDA estimates.
NerdWallet achieved the biggest analyst estimates beat among its peers. The stock is up 14.3% since reporting and currently trades at $13.73.
Read our full, actionable report on NerdWallet here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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