The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how diversified financial services stocks fared in Q3, starting with NerdWallet (NASDAQ: NRDS).
Diversified financial services encompass specialized offerings outside traditional categories. These firms benefit from identifying niche market opportunities, developing tailored financial products, and often facing less direct competition. Challenges include scale limitations, regulatory classification uncertainties, and the need to continuously innovate to maintain market differentiation against larger competitors expanding their offerings.
The 10 diversified financial services stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 3% on average since the latest earnings results.
NerdWallet (NASDAQ: NRDS)
Born from founder Tim Chen's frustration with the lack of transparent credit card information when helping his sister in 2009, NerdWallet (NASDAQ: NRDS) is a digital platform that provides financial guidance to help consumers and small businesses make smarter decisions about credit cards, loans, insurance, and other financial products.
NerdWallet reported revenues of $215.1 million, up 12.4% year on year. This print exceeded analysts’ expectations by 5.4%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ revenue and EPS estimates.
Interestingly, the stock is up 20.2% since reporting and currently trades at $14.41.
Best Q3: Paymentus (NYSE: PAY)
Founded in 2004 to simplify the complex world of bill payments, Paymentus (NYSE: PAY) provides a cloud-based platform that helps utilities, municipalities, and service providers automate billing and payment processes.
Paymentus reported revenues of $310.7 million, up 34.2% year on year, outperforming analysts’ expectations by 10.7%. The business had a stunning quarter with a solid beat of analysts’ revenue estimates and an impressive beat of analysts’ EBITDA estimates.
Paymentus achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 7.4% since reporting. It currently trades at $30.74.
Is now the time to buy Paymentus? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: NCR Atleos (NYSE: NATL)
Spun off from NCR Voyix in 2023 to focus exclusively on self-service banking technology, NCR Atleos (NYSE: NATL) provides self-directed banking solutions including ATM and interactive teller machine technology, software, services, and a surcharge-free ATM network for financial institutions and retailers.
NCR Atleos reported revenues of $1.12 billion, up 4.5% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
Interestingly, the stock is up 2.1% since the results and currently trades at $38.60.
Read our full analysis of NCR Atleos’s results here.
Donnelley Financial Solutions (NYSE: DFIN)
Born from the need to navigate increasingly complex financial regulations in the digital age, Donnelley Financial Solutions (NYSE: DFIN) provides software and technology-enabled services that help companies comply with SEC regulations and manage financial transactions and reporting requirements.
Donnelley Financial Solutions reported revenues of $175.3 million, down 2.3% year on year. This number surpassed analysts’ expectations by 3.3%. Overall, it was an exceptional quarter as it also produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.
Donnelley Financial Solutions had the slowest revenue growth among its peers. The stock is down 12.2% since reporting and currently trades at $45.41.
PayPal (NASDAQ: PYPL)
Originally spun off from eBay in 2015 after being acquired by the auction giant in 2002, PayPal (NASDAQ: PYPL) operates a global digital payments platform that enables consumers and merchants to send, receive, and process payments online and in person.
PayPal reported revenues of $8.42 billion, up 7.3% year on year. This print beat analysts’ expectations by 2.2%. It was a very strong quarter as it also put up a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ transaction volumes estimates.
The stock is down 13% since reporting and currently trades at $61.26.
Read our full, actionable report on PayPal here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory’s analyst team — all seasoned professional investors — uses quantitative analysis and automation to deliver market-beating insights faster and with higher quality.
