Block XYZ and Affirm AFRM are well-known providers in the rapidly evolving fintech sector. Both companies have gained significant attention in the market for their innovative approaches to digital payments and buy-now-pay-later (BNPL) services.

Per Fortune Business Insight report, the global fintech market was valued at $340.1 billion in 2024 and is expected to grow from $394.88 billion in 2025 to $1.13 billion by 2032 at a CAGR of 16.2% over the forecast period 2025-2032. Both XYZ and AFRM are likely to gain from the massive growth opportunity highlighted by the growth pace.

XYZ or AFRM — Which of these Fintech stocks has the greater upside potential? Let’s find out.

The Case of XYZ Stock

Block is benefiting from strong Cash App engagement and an expanding customer base. Cash App experienced impressive growth, with paycheck deposit actives reaching 2.5 million in December, a 25% year-over-year increase. This growth signals the increasing role of Cash App in the personal finance space.

Strength across the Cash App ecosystem on the back of Cash App Borrow is contributing well. Cash App Borrow saw significant growth with 5 million monthly active users by the end of 2024. Additionally, the integration of new features like Afterpay on the Cash App Card is expected to further accelerate growth.

The robust performance of the company’s ‘buy now, pay later’ platform has been noteworthy. BNPL platform grew 19% year over year to $10.3 billion in Gross Merchandise Value (GMV) in the fourth quarter of 2024, driven by the Pay-in-Four offering’s strong volume growth and gift cards.

The company’s investments in AI automation and open-source innovation are supporting long-term growth and operational efficiency. In March 2025, Block became the first company in North America to deploy the NVIDIA DGX SuperPOD with DGX GB200 systems for advancing open-source generative AI research in underexplored domains.

The Case of AFRM Stock

Affirm continues to benefit from strong consumer demand for flexible payment options, particularly in the BNPL sector. The company’s market leadership and expanding partnerships position it well to capitalize on this growing trend. This demand is reflected in AFRM’s strong performance, as it collaborates with merchants to integrate its pay-over-time solutions at the point of sale, boasting more than 337,000 active merchant partners as of Dec. 31, 2024, across diverse sectors.

Building on its market momentum, Affirm saw a 34.7% year-over-year increase in its Gross Merchandise Value (GMV), reaching $10.1 billion in the second quarter of fiscal 2025. This growth was driven by strength in general merchandise, travel, and ticketing categories, alongside a robust holiday season.

Strategic partnerships have also made the company’s international expansion more efficient. In April, AFRM extended its collaboration with Shopify to accelerate global expansion, launching Shop Pay Installments in Canada, with plans for broader availability in the U.K., Australia, and Western Europe.

In April, AFRM further enhanced its offerings by collaborating with Revolve Group to offer U.S. customers flexible payment options for premium fashion through Affirm’s buy-now, pay-later service. Following its U.S. launch, this partnership will also expand to Canada and the U.K.

Price Performance and Valuation of XYZ and AFRM

In the trailing-twelve month period, AFRM shares have surged 31.7%, outperforming XYZ shares, which have lost 24.8%. The drop in XYZ shares can be attributed to intensifying competition in the fintech industry. A challenging macroeconomic environment with the growing risk of a recession attributed to U.S. President Donald Trump’s plan to levy tariffs on trade partners China, Canada and Mexico is expected to be a headwind.

XYZ and AFRM Stock Price Performance

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Valuation-wise, AFRM and XYZ shares are currently overvalued, as suggested by a Value Score of F and C.

In terms of forward 12-month Price/Sales, AFRM shares are trading at 3.53X, higher than XYZ 1.24X.

XYZ and AFRM Valuation

Image Source: Zacks Investment Research

How Do Earnings Estimates Compare for XYZ & AFRM?

The Zacks Consensus Estimate for XYZ’s 2025 earnings is pegged at $4.12 per share, which has increased by a penny over the past 30 days. This indicates a 22.26% increase year over year.

The consensus mark for loss is pegged at 6 cents per share for AFRM’s fiscal 2025 earnings, which have improved 60% over the past 30 days. This indicates a 96.41% increase year over year.

AFRM earnings beat the Zacks Consensus Estimate in all the trailing four quarters, while XYZ has missed once. AFRM’s average surprise of 84.09% is better than surprise of 11.25%, reflecting good quality of earnings beat on a consistent basis. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Conclusion

Affirm’s improving fundamentals, upbeat earnings expectations, expanding international presence and robust partnership make the stock more attractive for investors seeking growth in the fintech space. Although Block’s rich partner base and expanding portfolio are noteworthy for investors, it suffers from challenging macroeconomic conditions, unfavorable forex and stiff competition. 

Currently, Affirm has a Zacks Rank #2 (Buy), making the stock a stronger pick compared to Block, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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