We recently compiled a list of the 10 Worst Performing Fintech Stocks to Buy According to Analysts. In this article, we are going to take a look at where Block, Inc. (NYSE:XYZ) stands against the other fintech stocks.
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.
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).
A businesswoman using a digital tablet, making a payment using the company’s payment processing technology.
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.
Overall, XYZ ranks 3rd on our list of the worst-performing fintech stocks to buy according to analysts. While we acknowledge the potential of XYZ as an investment, 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 XYZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.