The transition to digital payments from traditional payment methods has driven the demand for the services of various fintech companies. However, intense competition and the impact of macro pressures on consumer spending have adversely impacted fintech companies. Despite a challenging backdrop over the near term, Wall Street is bullish on several fintech companies due to their long-term growth prospects. Using TipRanks’ Stock Comparison Tool, we placed PayPal Holdings (PYPL), Block (XYZ), and MercadoLibre (MELI) against each other to find the best fintech stock, according to Wall Street analysts.
PayPal (NASDAQ:PYPL)
PayPal is considered one of the leading players in the fintech space. However, the company has been under pressure due to growing competition and macro challenges. PayPal is pursuing its turnaround strategy under the leadership of CEO Alex Chriss and trying to focus on high-margin businesses while controlling costs.
The company’s ongoing initiatives helped deliver better-than-expected fourth-quarter results. However, investors were not impressed due to the contraction in Q4 2024 operating margin and the slowdown in the total payment volume for PayPal’s unbranded payment processing business. Moreover, the growth in branded products lagged expectations.
Amid intense competition, PayPal is promoting its peer-to-peer payment Venmo platform as the “go-to money movement app” by driving in-store and online spending and enhancing merchant adoption. The company aims to boost Venmo app revenue to $2 billion by 2027. Further, as part of its turnaround efforts, PayPal is consolidating many of its offerings, including Braintree, Zettle, Hyperwallet, and Chargehound, into a single brand.
Is PayPal a Buy, Sell, or Hold?
Recently, TD Cowen analyst Bryan Bergin reiterated a Hold rating on PayPal stock with a price target of $83. The analyst thinks that PYPL’s mixed Q4 results have left investors uncertain about the company’s growth trajectory. He added that there are concerns about PayPal’s ability to sustain growth in its branded segment and deliver transaction margins effectively.
The analyst also notes that while PayPal’s capital allocation plans, like the $15 billion share buyback, are positive, uncertainties about the company’s approach to mergers and acquisitions and potential portfolio adjustments continue to weigh on investor sentiment. Overall, Bergin awaits additional clarity and evidence of execution from PayPal’s management.
Overall, Wall Street has a Moderate Buy consensus rating on PayPal stock based on 16 Buys and 13 Holds. The average PYPL stock price target of $96.44 implies about 30% upside potential. PayPal stock has declined 13.2% year-to-date.
Block, Inc. (NYSE:XYZ)
Fintech company Block operates through its two ecosystems: Cash App and Square. The company also owns the Afterpay, TIDAL, Bitkey, and Proto brands. XYZ stock plunged about 18% on February 21, as the company missed Q4 2024 revenue and earnings expectations. Block is facing increased rivalry from players like Toast and Fiserv’s Clover unit.
On the positive side, Cash App’s gross profit increased 16% year-over-year and beat analysts’ estimates. The Cash App ecosystem continues to be a primary growth driver for the company. Block expects the Cash App Borrow and Afterpay offerings to drive the acceleration in Cash App’s growth into 2026.
Is Block Stock a Good Buy?
On February 24, BMO Capital analyst Rufus Hone upgraded Block stock to Buy from Hold but decreased the price target to $89 from $100. The analyst thinks that the sell-off following the Q4 2024 earnings presents an attractive entry opportunity in XYZ stock. Hone believes that there is now less downside risk to the Street’s estimates. Specifically, expectations for Square and Cash App’s gross profit growth appear more achievable.
In fact, Hone sees the possibility for sentiment to improve through 2025 as Cash App and Square businesses accelerate gross profit growth. While Square is expected to gain from product innovations, distribution enhancements, and a refreshed sales strategy, Cash App’s average revenue per user is expected to remain solid, bolstered by the integration of Cash App Borrow, BNPL (buy now, pay later), and Afterpay.
With 25 Buys and three Holds, XYZ stock scores a Strong Buy consensus rating on TipRanks. The average XYZ stock price target of $100.76 implies about 60.3% upside potential from current levels. Block stock is down more than 26% so far this year.
MercadoLibre (NASDAQ:MELI)
MercadoLibre is a Latin American e-commerce and fintech company. MELI stock surged and touched an all-time high when the company recently announced better-than-expected fourth-quarter results. The Q4 2024 performance addressed the profitability concerns triggered by the third-quarter results due to a notable rise in bad debt losses.
Notably, MercadoLibre saw an expansion in its net margin and a rebound in the Q4 2024 operating margin. The company highlighted that it witnessed over 100 million annual unique buyers on its marketplace and 61 million fintech monthly active users (MAUs) on its Mercado Pago platform for the first time. Moreover, MercadoLibre’s gross merchandise volume (GMV) surpassed $50 billion for the first time in 2024. Additionally, the total payment volume jumped 34% to $196.7 billion last year.
What Is the Target Price for MELI Stock?
In reaction to the Q4 2024 print, Raymond James analyst Josh Beck increased the price target for MercadoLibre stock to $2,650 from $2,250 and reiterated a Buy rating. Beck believes that MELI’s Q4 results reinforce the factors backing his recent rating upgrade based on improving fintech profitability and easing fulfillment headwinds.
Commenting on the company’s fintech business, the five-star analyst noted that revenue was lower mainly due to slowing card growth.
Overall, MELI stock has a Strong Buy consensus rating based on 10 Buys versus one Hold recommendation. The average MercadoLibre stock price target of $2,591.82 implies about 19.5% upside potential. MELI stock has risen 27.5% so far in 2025.
Conclusion
Wall Street is highly bullish on Block and MercadoLibre stocks, but cautiously optimistic on PayPal stock. Currently, analysts see higher upside potential in XYZ stock than in the other two fintech stocks. They view the pullback in Block stock as an attractive buying opportunity to gain from the long-term growth prospects.