Goldman Sachs on Tuesday raised its revenue and earnings-per-share estimates for fintech stocks under coverage by low single digits, citing resilient performance in the sector despite mixed earnings results.
The median stock in the bank’s fintech coverage gained 13% quarter-to-date, reflecting modest gains since the release of second-quarter earnings. The largest upward revisions were applied to Chime, Remitly and Par Technology, while Western Union, Fiserv and Shift4 Payments received the most significant downward adjustments.
Block Inc drew investor scrutiny after its latest earnings report, with Goldman Sachs attributing the post-release selloff to elevated expectations, crowded positioning and lower-than-anticipated cost savings from staff reductions. Analysts also highlighted debates over the pace of deceleration in Cash App lending revenue.
Sentiment improved for merchant processors Global Payments and Shift4 Payments, which both signaled potential product cycles that could bolster organic growth. Global Payments trades at 9.4 times enterprise value to unlevered free cash flow for 2027, while Shift4 Payments is valued at 11.8 times on the same basis.
Fiserv continued to face investor skepticism, with questions persisting about its merchant business and the sustainability of Clover’s growth amid channel disruptions and competitive pressures.
Card networks Visa and Mastercard remained a focal point, as some investors anticipated peak spending momentum in the second quarter due to pricing, global sporting events and strong U.S. consumer activity. Visa secured a major portfolio win from Mastercard by landing the Natwest Credit portfolio, following Natwest’s prior shift of its debit portfolio to Mastercard over the past two years. Goldman Sachs noted concerns about Mastercard’s 2027 revenue outlook, citing the expiration of Capital One contract revenue floors, ongoing credit migrations at Capital One and losses in cross-border and Natwest portfolios.
Chime addressed negative sentiment entering the quarter by demonstrating faster revenue benefits from its Chime Prime membership tier and outperforming on spend volume. Analysts also pointed to upside risks for 2027 estimates tied to Instant Loans and Chime Enterprise.
