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 PayPal Holdings, Inc. (NASDAQ:PYPL) 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 consumer in a cafe paying for goods using a mobile payment app.

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.

Overall, PYPL ranks 7th on our list of the worst-performing fintech stocks to buy according to analysts. While we acknowledge the potential of PYPL 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 PYPL 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.

Disclosure: None. This article is originally published at Insider Monkey.