Jared Isaacman, CEO of Shift4 Payments, at the New York Stock Exchange on June 3, 2021.
Source: NYSE
Fintech stocks were in focus Tuesday as fresh earnings reports and analyst notes drove sharp reactions across the sector.
Shift4 Payments and Upstart Holdings surged following upbeat news, while PayPal shares were slightly higher despite delivering a strong earnings beat.
Shift4 shares rose more than 10% after the company reported better-than-expected first-quarter results and raised its full-year guidance.
Shift4 reported adjusted earnings of $1.07 per share, above the LSEG expectation of 71 cents per share. Sales in the first quarter of $848 million were below the consensus estimate of $868 million.
The payments firm, which has been pushing into new verticals like stadiums, gaming and travel, projected adjusted EBITDA of $853 million for FY 2025, up from $843 million. End-to-end payment volume hit $45 billion for the quarter, topping StreetAccount’s consensus estimate of $43 billion.
Shift4 Payments one day stock chart
Upstart Holdings rallied after Bank of America upgraded the stock to neutral from underperform, setting a $53 price target. The firm cited a more balanced risk-reward outlook, supported by improving business fundamentals and a more reasonable valuation, following a 45% decline in Upstart shares since mid-February.
Analysts pointed to encouraging signs of recovery, particularly Upstart’s increasingly diversified loan portfolio, which is expected to provide more stable volumes. Over the past 18 months, Upstart has added prime loans, HELOCs, small-dollar loans, and enhanced its auto loan product — expanding its addressable market beyond subprime borrowers and reducing its reliance on riskier credit segments.
Shares of Upstart have traded sharply higher after each of the last three earnings reports, as improvements in funding and loan volumes boosted investor confidence. Still, nearly 28% of Upstart’s shares are currently shorted, according to Bloomberg.
Upstart reports first-quarter earnings on May 6 with an AI-focused Investor Day scheduled for May 14.
upstart one day stock chart
PayPal, meanwhile, delivered a mixed headline quarter. Shares were 1.5% higher after reporting an earnings beat and revenue that fell slightly short of the Street’s estimate.
One bright spot was Venmo, where revenue rose 20% year-over-year, reflecting early progress in the company’s effort to better monetize the platform.
While it has long been a popular consumer service for sending money to friends, Venmo’s ability to drive meaningful revenue has been a major question mark for investors, especially as competition from rivals such as Zelle and Square Cash has intensified.
PayPal shares move higher after reporting earnings
Venmo’s total payment volume rose 10% from a year earlier, but revenue grew twice as fast, reflecting the business opportunity. Venmo only gets revenue from specific products such as Pay with Venmo at online checkout, Venmo debit cards and instant transfers, but not from peer-to-peer payments.
Analysts at Mizuho said on Tuesday that while the stock reaction was initially negative, they expect it to rebound. They noted that branded total payment volume rose 6% year-over-year excluding leap day effects — a better result than expected — and that PayPal reiterated its full-year total payment volume growth target despite macroeconomic uncertainty, signaling underlying strength.
However, Mizuho flagged that keeping full-year EPS guidance unchanged despite a lower tax rate could remain a drag on sentiment.
