Mark Palmer, Managing Director at Benchmark, joined Yahoo Finance Live on February 15, 2025, to discuss the fintech sector. He emphasized that it is currently a “stock picker’s sector.” Palmer noted that valuations in the fintech space are not connected with the growth potential of many companies.
However, he noted that not all of the fintech companies are equally positioned for success. He believes that companies heavily tied to credit, such as neobanks and online lenders, continue to be vulnerable because of growing concerns about consumer credit tightening.
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Palmer noted that some fintech companies are well-positioned to help consumers during a difficult time. For instance, companies that serve as a substitute for traditional banking, particularly for lower-income individuals who face barriers at traditional banks. He believes this type of value-added service is sustainable and companies that offer such services could experience stock boosts.
In the fintech sector, careful stock selection could be crucial. Analysts and experts see opportunities for growth in companies that offer meaningful consumer solutions.
With this background in mind, let’s take a look at the 10 worst-performing fintech stocks to buy according to analysts.
A close-up of a hand scrolling through a mobile device’s financial technology dashboard.
Methodology
To compile our list of the 10 worst-performing fintech stocks to buy according to analysts, we looked for fintech companies. We reviewed our own rankings, financial media reports, ETFs, and various online resources to compile a list of fintech stocks. Then we looked for the worst-performing stocks in the fintech sector and narrowed down our list to stocks that have fallen by at least 12% year-to-date as of February 28, 2025. Next, we focused on the top fintech stocks that analysts believe have the most potential for growth. Finally, we ranked the 10 worst-performing fintech stocks to buy based on their average price target upside potential according to analysts, as of February 28, 2025.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Worst Performing Fintech Stocks to Buy According to Analysts
10. Q2 Holdings, Inc. (NYSE:QTWO)
Year-to-Date Performance: -12.23%
Average Price Target Upside Potential According to Analysts: 24.76%
Number of Hedge Fund Holders: 29
Q2 Holdings, Inc. (NYSE:QTWO) is a leading provider of cloud-based digital banking and lending solutions to banks, credit unions, and financial technology companies in the US and internationally. The company offers a range of solutions including digital banking, digital onboarding, risk and fraud management, relationship pricing and profitability, lending, and embedded finance. Through its comprehensive solution set, Q2 Holdings, Inc. (NYSE:QTWO) enables its customers to easily onboard, grow, and serve their consumer, small business, and corporate clients. QTWO is one of the worst-performing stocks to buy in the fintech sector.
On February 13, 2025, Citi analyst Andrew Schmidt raised the price target for Q2 Holdings, Inc. (NYSE:QTWO) to $100 from $96 and kept a ‘Neutral’ rating. This reflects the company’s strong performance in Q4 2024, driven by significant client renewal activity and high demand. Q2 Holdings, Inc. (NYSE:QTWO) secured seven Tier 1/Enterprise deals during the quarter. The company also achieved record cross-selling and renewals and nearly doubled new digital banking customers among Tier 2/3 financial institutions for 2024. Subscription annual recurring revenue grew about 15% year-over-year, supported by the company’s strong booking activity. Schmidt noted that Q2 Holdings, Inc. (NYSE:QTWO) has the potential to further penetrate the market, building on its success in securing Tier 1/enterprise clients over the past two years. Q2 Holdings, Inc. (NYSE:QTWO) is positioned well in the market due to the limited availability of high-quality digital solutions, especially in the commercial sector.
9. Lightspeed Commerce Inc. (NYSE:LSPD)
Year-to-Date Performance: -19.76%
Average Price Target Upside Potential According to Analysts: 25.72%
Number of Hedge Fund Holders: 18
Lightspeed Commerce Inc. (NYSE:LSPD) is a Canadian financial technology company that provides point-of-sale and e-commerce software. The company operates a comprehensive platform and offers cloud commerce solutions that help businesses manage their online and physical sales operations, including inventory, payments, customer engagement, and reporting. It allows businesses to simplify, scale, and enhance customer experiences across various channels. The company serves retail, hospitality and golf businesses in more than 100 countries. Lightspeed Commerce Inc. (NYSE:LSPD) ranks among the worst-performing stocks to buy in the fintech sector.
In February 2025, the company announced the results of its strategic review on transforming the business to maximize value and profitability. Lightspeed Commerce Inc. (NYSE:LSPD) plans to grow its retail operations in North America and hospitality services in Europe. The company will strategically focus on expanding locations, increasing revenue per user through software and payment solutions, and optimizing other business areas for improved efficiency and profitability. With this new strategy, Lightspeed Commerce Inc. (NYSE:LSPD) will focus on improving sales with AI-driven tools, enhancing inventory and supplier management for retail, and optimizing guest experiences and analytics for hospitality.
The company has already released several new products in the quarter ending December 31, 2024, to enhance its retail and hospitality offerings. For retail, Lightspeed Commerce Inc. (NYSE:LSPD) expanded the Lightspeed Scanner on the Lightspeed iOS app, enabling mobile payments directly from the retail floor. The company also expanded Lightspeed Payments to support suppliers in Australia, the UK, the Netherlands, and Belgium. For hospitality in Europe, Lightspeed Commerce Inc. (NYSE:LSPD) introduced a Kitchen Display System to streamline order flow between front- and back-of-house operations and introduced Lightspeed Pulse, which provides restaurateurs mobile access to actionable insights and key metrics like sales and live orders.
8. Paymentus Holdings, Inc. (NYSE:PAY)
Year-to-Date Performance: -16.05%
Average Price Target Upside Potential According to Analysts: 31.39%
Number of Hedge Fund Holders: 25
Paymentus Holdings, Inc. (NYSE:PAY) is a US-based financial technology company that is focused on simplifying bill payments. The company offers cloud-based billing and payment solutions to billers and financial institutions in North America. The company serves clients of various sizes across a range of industry verticals, including utilities, financial services, insurance, government, telecommunications, and healthcare. According to analysts, Paymentus Holdings, Inc. (NYSE:PAY) is one of the worst-performing stocks to buy.
In the third quarter of 2024, the company reported a record revenue of $231.6 million, a year-over-year increase of 51.9%. This growth was driven primarily by more billers and transactions. Paymentus Holdings, Inc. (NYSE:PAY) is focused on long-term growth through its innovative platform and Integrated Payment Network (IPN), which has helped the company end the quarter with strong bookings and backlog. The company signed several clients across industries like insurance, government services, municipalities, utilities, education, telecommunications, banks, credit unions, and property management. This contributed to the company’s continued momentum and positions Paymentus Holdings, Inc. (NYSE:PAY) for success in 2025 and beyond because of the multiyear nature of these agreements.
7. PayPal Holdings, Inc. (NASDAQ:PYPL)
Year-to-Date Performance: -17.56%
Average Price Target Upside Potential According to Analysts: 33.00%
Number of Hedge Fund Holders: 94
PayPal Holdings, Inc. (NASDAQ:PYPL) is an American multinational financial technology company that offers online payment solutions in approximately 200 markets around the world. The company operates an online payment system and offers digital payments to consumers and businesses. PayPal Holdings, Inc. (NASDAQ:PYPL) ranks among the worst-performing stocks to buy in the fintech sector.
The company is strategically focused on innovation to drive growth and further strengthen its position in payments and commerce. In 2024, the company introduced new branded checkout experiences, launched PayPal Everywhere, rolled out Fastlane, and expanded PayPal Complete Payments. With PayPal Complete Payments, PayPal Holdings, Inc. (NASDAQ:PYPL) is creating an end-to-end suite of solutions to address the needs of small businesses. In September 2024, the company introduced PayPal Everywhere. PayPal Holdings, Inc. (NASDAQ:PYPL) reported that this is driving significant growth in debit card adoption and opening new categories of spend. As a result, the company added over 1.5 million first-time PayPal debit card users in Q4 2024 and debit card total payment volume (TPV) increased nearly 100% in the quarter. PayPal Holdings, Inc. (NASDAQ:PYPL) aims to expand PayPal Everywhere to a number of European markets in 2025.
6. Flywire Corporation (NASDAQ:FLYW)
Year-to-Date Performance: -43.28%
Average Price Target Upside Potential According to Analysts: 44.74%
Number of Hedge Fund Holders: 34
Flywire Corporation (NASDAQ:FLYW) is a US-based global payments enablement and software company that offers an advanced payments platform, proprietary payment network, and vertical-specific software to power global payment flows across multiple currencies, payment types, and payment options. The company supports its clients from various industries and their customers with diverse payment methods in over 140 currencies across 240 countries and territories around the world. Flywire Corporation (NASDAQ:FLYW) ranks among the worst-performing stocks to buy in the fintech space.
A key strategic focus for Flywire Corporation (NASDAQ:FLYW) is combining software with payment solutions to serve the business-to-business (B2B) vertical better. In August 2024, the company acquired Invoiced, a SaaS platform specializing in automating the order-to-cash process for B2B finance teams. This transaction builds on Flywire Corporation’s (NASDAQ:FLYW) B2B payments business and enhances the software suite the company provides to its global clients and target segments. Flywire Corporation (NASDAQ:FLYW) estimates that the B2B target segment is responsible for approximately $10 trillion in global payment volume.
In 2024, the company focused on optimizing its global payment network and expanding its network coverage. Flywire Corporation (NASDAQ:FLYW) strengthened its presence in strategic markets like India and China by digitizing student loan disbursements and partnering with India’s 3 largest banks. The company signed more 800 new clients in fiscal year 2024, surpassing the 700 added in 2023. For 2024, Flywire Corporation (NASDAQ:FLYW) reported a 23.6% year-over-year growth in transaction volume to $29.7 billion.
5. Alkami Technology, Inc. (NASDAQ:ALKT)
Year-to-Date Performance: -16.42%
Average Price Target Upside Potential According to Analysts: 45.91%
Number of Hedge Fund Holders: 30
Alkami Technology, Inc. (NASDAQ:ALKT) is a leading cloud-based digital banking solutions provider for financial institutions in the United States. The company offers retail and business banking, digital account opening, payment security, and data and marketing solutions for banks and credit unions. Alkami Technology, Inc. (NASDAQ:ALKT) is one of the worst-performing stocks to buy in the fintech space.
In its Q4 2021 earnings call, which it referenced in its Q4 2024 earnings call, Alkami Technology, Inc. (NASDAQ:ALKT) pointed out its long-term business goals, which included succeeding in the bank market, leveraging add-on sales to drive growth, investing in its platform, and using acquisitions to drive expansion. By the end of 2024, the company had 42 banks under contract, including 23 live on the Alkami platform and 19 in its backlog. This compares to 8 banks on the company’s platform by the end of 2021. In 2024, Alkami Technology, Inc. (NASDAQ:ALKT) also became the top digital banking provider for credit unions in terms of mobile users. In 2024, add-on sales made up 45% of new bookings, up from 24% in 2021.
In February 2025, Alkami Technology, Inc. (NASDAQ:ALKT) announced its agreement to acquire MANTL for an enterprise value of $400 million. MANTL is a premier account opening solution that allows financial institutions to onboard commercial, business and retail customers across various channels for virtually any deposit account type. This transaction is expected to complement Alkami Technology, Inc.’s (NASDAQ:ALKT) existing digital banking and data marketing solutions to create an advanced digital sales and services platform for financial institutions.
4. Payoneer Global Inc. (NASDAQ:PAYO)
Year-to-Date Performance: -15.76%
Average Price Target Upside Potential According to Analysts: 49.12%
Number of Hedge Fund Holders: 35
Payoneer Global Inc. (NASDAQ:PAYO) is an American financial technology company that offers digital payment services, and online money transfers, and provides customers with working capital to help them grow their businesses. The company operates an online platform for cross-border payments, enabling freelancers, businesses, and online sellers to send and receive money globally in multiple currencies. Payoneer Global Inc. (NASDAQ:PAYO) ranks among the worst-performing stocks to buy in the fintech sector.
The company is focused on expanding its presence in marketplace e-commerce and enhancing its offerings for small and medium-sized businesses (SMBs) through innovative financial solutions and strategic acquisitions. In 2024, Payoneer Global Inc. (NASDAQ:PAYO) acquired Skuad, a global workforce and payroll management firm. This move will help the company deliver a comprehensive financial stack for internationally operating SMBs. Additionally, in February 2025, Payoneer Global Inc. (NASDAQ:PAYO) announced that it had received regulatory approvals in China to acquire a local payment service provider. This transaction is on track to close in the first half of 2025.
3. Block, Inc. (NYSE:XYZ)
Year-to-Date Performance: -24.73%
Average Price Target Upside Potential According to Analysts: 50.08%
Number of Hedge Fund Holders: 81
Block, Inc. (NYSE:XYZ) is an American financial technology company that ranks among the worst-performing stocks to buy. The company provides a range of products and services. Through its main product, Square, the company makes commerce and financial services accessible to sellers. Cash App allows users to send, receive, or hold money, invest in stocks and Bitcoin, apply for personal loans, and file taxes. Block, Inc. (NYSE:XYZ) owns Afterpay, a buy now, pay later (BNPL) business. Additionally, the company offers music streaming services through Tidal. Block, Inc. (NYSE:XYZ) operates a diverse business model that serves various customer needs and generates multiple revenue streams.
The company is focused on growing its business through innovative strategies and product development. In 2024, Block, Inc. (NYSE:XYZ) focused on improving Square’s onboarding, commerce, and app infrastructure. The company launched a new single app for sellers to simplify the onboarding process and make Square’s features more accessible. Additionally, Block, Inc. (NYSE:XYZ) introduced new products to support sellers, such as scan-to-pay functionality and house accounts. These moves will help the company expand into new markets and enhance customer experience.
The company continues to expand its financial services ecosystem through Cash App’s “bank our base” strategy. Block, Inc. (NYSE:XYZ) aims to make Cash App the leading banking service provider for US households earning up to $150,000 per year. The company is creating competitive banking offerings and introducing benefits like free overdraft coverage, a 4% interest rate on savings, and priority phone support. In February 2024, Block, Inc. (NYSE:XYZ) integrated Afterpay with the Cash App Card, allowing customers to retroactively pay over time for their purchases. These moves are aimed at increasing engagement and usage across the company’s platforms. Block, Inc. (NYSE:XYZ) reported that Cash App Card has successfully grown to 25 million monthly active users as of December 2024.
2. Coinbase Global, Inc. (NASDAQ:COIN)
Year-to-Date Performance: -16.16%
Average Price Target Upside Potential According to Analysts: 56.29%
Number of Hedge Fund Holders: 69
Coinbase Global, Inc. (NASDAQ:COIN) is an American company that provides a platform for individuals and institutions to buy, sell, transfer, trade, stake, and safekeep crypto assets. Through one of the world’s biggest cryptocurrency exchange platforms, it serves customers in more than 100 countries. Coinbase Global, Inc. (NASDAQ:COIN) is one of the worst-performing stocks to buy in the fintech industry.
On February 19, Compass Point analyst Chase White increased the price target for Coinbase Global, Inc. (NASDAQ:COIN) to $365 from $295 and reiterated a “Buy” rating. The analyst expects the company to grow thanks to its strong retail market share and growing subscription and service revenues. The firm’s analyst also pointed out near-term opportunities for Coinbase Global, Inc. (NASDAQ:COIN), including the potential of Stablecoin and Base L2, a Layer 2 blockchain solution developed by the company to enhance Ethereum’s scalability. White pointed out that the USDC market cap is approaching all-time highs and that Coinbase Global, Inc. (NASDAQ:COIN) has an edge over its competitors like Tether in on-chain transfer volumes. Furthermore, the analyst believes that financial institutions will adopt these platforms, particularly after potential legislative developments. White expects these developments to take place in 2025.
1. BILL Holdings, Inc. (NYSE:BILL)
Year-to-Date Performance: -34.32%
Average Price Target Upside Potential According to Analysts: 57.61%
Number of Hedge Fund Holders: 64
BILL Holdings, Inc. (NYSE:BILL) is an American financial technology company that provides automated, cloud-based software for financial operations. The company focused on small and mid-sized businesses in a range of industries. BILL Holdings, Inc. (NYSE:BILL) helps businesses streamline their financial workflow, generate and process invoices, streamline approvals, send and receive payments, sync with their accounting system, and manage their cash. As a result, the company plays a key role in the accounts payable and accounts receivable operations for businesses. BILL ranks among the worst-performing stocks to buy in the fintech sector.
The company is continuously innovating to meet the expanding and changing financial operations needs of small and mid-sized businesses (SMBs). Some recent examples by BILL Holdings, Inc. (NYSE:BILL) include procure-to-pay experience and powerful multi-entity tools that allow larger businesses to drive more automation and improve efficiency. Additionally, BILL Holdings, Inc. (NYSE:BILL) has significantly enhanced its payment offerings, particularly card services. This strategy has led to card adoption more than tripling over the past 2 years among the accounts payable and accounts receivable customers.
The company is focused on transforming financial operations for millions of SMBs by leveraging its AI-enabled platform and efficient go-to-market strategies to drive growth and leadership in the market. In the second fiscal quarter of 2025, which ended December 31, 2024, BILL Holdings, Inc. (NYSE:BILL) processed $84 billion in total payment volume, up 13% compared to the same quarter in the previous year. BILL Holdings, Inc. (NYSE:BILL) processed 30 million transactions during the quarter, an increase of 17% year-over-year.
Overall, BILL ranks first among the 10 worst-performing fintech stocks to buy according to analysts. While we acknowledge the potential of fintech companies, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BILL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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