The financial technology space is expected to benefit from expanding transaction volumes resulting from the widespread adoption of digital means. The ongoing digitization movement, triggered by the pandemic, is a major catalyst for this industry. 

Financial technology represents a transformative investment space within a hybrid sector merging finance and technology. The companies in this space offer a variety of services, such as online banking, peer-to-peer payments, insurance, cryptocurrency and cybersecurity, among others.

Investors’ eyes are on two large-cap financial technology stocks are set to report earnings results this week. These are -- Affirm Holdings Inc. (AFRM Quick QuoteAFRM - Free Report) and Lyft Inc. (LYFT Quick QuoteLYFT - Free Report) . The combination of a potential earnings beat with a favorable Zacks Rank should drive their stock prices in the near term.

Find the latest earnings estimates and surprises on Zacks Earnings Calendar.

Buy 2 Financial Technology Stocks Set to Beat on Earnings 

We have narrowed our search to two large-cap financial technology stocks set to report earnings results this week. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.

Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better (Rank #1 or 2) and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The chart below shows the price performance of our two picks in the past three months.

Image Source: Zacks Investment Research

Affirm Holdings Inc.

Zacks Rank #1 Affirm Holdings has achieved strong revenue growth through diverse income streams, including merchant network fees, interest from loans and virtual card revenues. In fiscal 2024, AFRM’s revenues increased 46.3% year over year. Improving gross merchandise value and the average balance of loans are driving merchant network revenues and interest income, respectively. 

Key partnerships with Apple Pay and Hotels.com play a vital role in AFRM’s expansion. Affirm Holding’s advanced machine learning enhances fraud detection and credit risk assessment, improving personalization and efficiency. Plans to expand into the United Kingdom by fiscal 2025 further broaden its geographic footprint. AFRM has an Earnings ESP of +10.11%. The company will report on Nov 7, after the closing bell.

Impressive Earnings Estimate Revisions for AFRM Stock

For first-quarter fiscal 2025, the Zacks Consensus Estimate currently shows revenues of $661.39 million, suggesting an improvement of 33.2% year over year. The Zacks Consensus Estimate for the quarter’s EPS has improved 5.3% in the last 30 days. 

Moreover, Affirm Holdings has witnessed positive earnings estimate revisions for fiscal 2025 (ending June 2025) and fiscal 2026 in the last 30 days. At present, the Zacks Consensus Estimate indicates a year-over-year increase of 29.7% and 62.9%, respectively, for revenues and EPS in fiscal 2025. The current Zacks Consensus Estimate for fiscal 2026 revenues and EPS reflects an upside of 21.5% and more than 100%, respectively.

Lyft Inc.

Zacks Rank #2 Lyft remains on track to achieve positive free cash flow for 2024. Given its improved visibility into the first half of the year, LYFT anticipates converting more than 90% of adjusted EBITDA to free cash flow for 2024. This marks an improvement over the previous expectation of converting roughly half of adjusted EBITDA to free cash flow for 2024. 

This improved outlook for 2024 free cash flow looks encouraging and raises optimism about LYFT. The company is benefiting from an uptick in driver supply. Expecting growth in rides to continue, Lyft continues to anticipate year-over-year growth in the mid-teens for 2024. LYFT has an Earnings ESP of +5.00%. The company will report on Nov 6, after the closing bell.

Solid Earnings Estimate Revisions for LYFT Shares

For third-quarter 2024, the Zacks Consensus Estimate currently shows revenues of $1.43 billion, suggesting an improvement of 23.3% year over year. The Zacks Consensus Estimate for the quarter’s EPS has improved 5.3% in the last 30 days. LYFT delivered positive earnings surprises in the last four reported quarters with an average beat of 78.8%.

Moreover, Lyft has witnessed positive earnings estimate revisions for 2024 and 2025 in the last 30 days. At present, the Zacks Consensus Estimate indicates a year-over-year increase of 27.4% and 21.5%, respectively, for revenues and EPS in 2024. The current Zacks Consensus Estimate for 2025 revenues and EPS reflects an upside of 14.6% and 25.5%, respectively.