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PayPal vs. Block: Which Fintech Stock is a Better Buy Right Now?
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Key Takeaways
PayPal and Block posted contrasting Q3 results, highlighting different strengths in fintech.
PayPal saw solid revenues, TPV and EPS gains while pushing innovations across checkout, Venmo and new vectors.
Block's quarter featured strong gross profit growth led by Cash App and continued product expansion.
PayPal Holdings (PYPL - Free Report) and Block (XYZ - Free Report) remain key players in the fintech industry. Both companies continue to transform digital payments and commerce, though their strategies differ: PayPal leverages its global, two-sided payments and commerce platform, while Block thrives on the dual ecosystem of Square and Cash App.
Their latest third-quarter 2025 earnings highlight diverging strengths, PayPal is gaining ground in profitability and platform innovation, whereas Block stands out for its expanding network and product velocity. Let’s examine the pros and cons of each to see which might earn a place in your portfolio.
The Case for PayPal
On paper, PayPal delivered a solid third quarter, with revenues rising 7.3% year over year to $8.42 billion, Total Payment Volume (“TPV”) climbing 8.4% and non-GAAP EPS growing 11.7% to $1.34. Transaction margin dollars (“TM$”), excluding interest on customer balances, rose 7.1%, underscoring the health of its core payments engine. Importantly, PayPal raised its full-year EPS and transaction margin dollar guidance, signaling confidence in sustained momentum.
Strategically, PayPal is executing on four growth pillars: winning checkout, scaling omni and Venmo, driving payment services profitability, and investing in next-gen vectors like AI, ads and stablecoins. Venmo, in particular, grew revenues more than 20% year over year in the third quarter of 2025, with Venmo Debit Card monthly active account growth of more than 40% and Pay with Venmo TPV soaring approximately 40%.
PayPal signed a two-year agreement with Blue Owl Capital to fund U.S. “Pay in 4” loans. It teamed up with Google to deliver frictionless digital commerce experiences. The company launched PayPal links for easy money transfers through a personalized, one-time link. It gave early access to Perplexity’s Comet browser for U.S. and some global users. It also introduced PayPal World for seamless global wallet interoperability. These initiatives strengthen its relevance in both e-commerce and offline retail while laying the groundwork for new revenue streams.
PayPal still faces challenges. While TPV rose 8.4%, payment transactions fell 4.5%. Engagement per user also slipped, with payment transactions per active account on a trailing 12-month basis declining 6.2% year over year. Still, excluding low-margin processing, engagement improved.
Compared to Block, PayPal operates on a larger global scale and has a stronger presence in branded checkout. However, its growth is steady rather than rapid. Investors who want a mix of stability, profitability and innovation may find PayPal’s improving fundamentals more attractive.
The Case for Block
Block’s third quarter was a story of strong gross profit growth and decent top-line performance. Net revenues increased 2.3% year over year to $6.11 billion, missing expectations, while the gross profit rose 18.3% to $2.66 billion, with Cash App rising 24.3% and Square increasing 9.2%. Adjusted operating income surged 8.3% year over year, with a margin of 18%, showing that scale and efficiency are starting to pay off.
Block’s strength lies in Cash App’s momentum. With $1.62 billion in gross profit, Cash App continues to serve as a financial hub for younger customers, expanding into P2P, commerce, banking and bitcoin.
The company introduced new products like Cash App Pools for group payments, Afterpay integrations and enhanced borrowing features, all deepening engagement. Cash App launched Tap to Pay on iPhone for Cash App Business sellers, enabling them to accept contactless payments. Meanwhile, Square announced enhancements to its conversational AI assistant, Square AI and launched Square Cash Advance in the U.K. to fund businesses. Together, these ecosystems reinforce Block’s ambition to be a comprehensive financial operating system.
Block faces some challenges along the way. Bitcoin plays an important role in Block’s revenue generation, but it makes the company’s performance volatile. Competition is tough, especially in consumer payments, where PayPal and other global players already have stronger networks with merchants. Although Block is very innovative, most of its growth is centered in the United States and depends heavily on Cash App’s younger users, making its reach smaller than PayPal’s global presence.
How Do Zacks Estimates Compare for PYPL & XYZ?
The Zacks Consensus Estimate for PayPal’s 2025 sales and EPS implies a year-over-year increase of 4.72% and 14.62%, respectively. EPS estimates have been trending northward over the past month.
Image Source: Zacks Investment Research
Meanwhile, the consensus estimate for Block’s 2025 sales calls for a year-over-year rise of 0.99%, while that for EPS suggests a 24.04% decline year over year. EPS estimates have also been trending southward over the past month.
Image Source: Zacks Investment Research
Valuation: PYPL vs. XYZ
From a valuation perspective, we note that PayPal shares are trading cheap, as suggested by the Value Score of A. However, Block shares are currently overvalued, as implied by the Value Score of D.
In terms of forward 12-month Price/Sales (P/S), PYPL stock is trading at 1.76X, below its three-year median, while Block is currently trading at 1.43X, which is also below its three-year median.
Image Source: Zacks Investment Research
Price Performance: PYPL vs. XYZ
Over the past three months, shares of PYPL have outperformed XYZ, while PYPL has underperformed the S&P 500 composite.
Image Source: Zacks Investment Research
Conclusion: PayPal Remains Strong
Both PayPal and Block reported strong third-quarter 2025 results, but their paths are different. PayPal shows it can grow steadily and profitably while also investing in next-gen commerce and global wallet connectivity. Block is very active in product innovation and keeping users engaged, but its earnings are more unpredictable. For investors choosing now, PayPal seems like a safer choice to buy because of its scale, profitability and resilience. Block is still valuable to hold because of its powerful ecosystems and long-term potential, but PayPal’s execution and global reach give it the edge right now. Estimate revisions and valuations also suggest the same.
Currently, PYPL has a Zacks Rank #3 (Hold), while Block carries a Zacks Rank #4 (Sell).
Image: Bigstock
PayPal vs. Block: Which Fintech Stock is a Better Buy Right Now?
Key Takeaways
PayPal Holdings (PYPL - Free Report) and Block (XYZ - Free Report) remain key players in the fintech industry. Both companies continue to transform digital payments and commerce, though their strategies differ: PayPal leverages its global, two-sided payments and commerce platform, while Block thrives on the dual ecosystem of Square and Cash App.
Their latest third-quarter 2025 earnings highlight diverging strengths, PayPal is gaining ground in profitability and platform innovation, whereas Block stands out for its expanding network and product velocity. Let’s examine the pros and cons of each to see which might earn a place in your portfolio.
The Case for PayPal
On paper, PayPal delivered a solid third quarter, with revenues rising 7.3% year over year to $8.42 billion, Total Payment Volume (“TPV”) climbing 8.4% and non-GAAP EPS growing 11.7% to $1.34. Transaction margin dollars (“TM$”), excluding interest on customer balances, rose 7.1%, underscoring the health of its core payments engine. Importantly, PayPal raised its full-year EPS and transaction margin dollar guidance, signaling confidence in sustained momentum.
Strategically, PayPal is executing on four growth pillars: winning checkout, scaling omni and Venmo, driving payment services profitability, and investing in next-gen vectors like AI, ads and stablecoins. Venmo, in particular, grew revenues more than 20% year over year in the third quarter of 2025, with Venmo Debit Card monthly active account growth of more than 40% and Pay with Venmo TPV soaring approximately 40%.
PayPal signed a two-year agreement with Blue Owl Capital to fund U.S. “Pay in 4” loans. It teamed up with Google to deliver frictionless digital commerce experiences. The company launched PayPal links for easy money transfers through a personalized, one-time link. It gave early access to Perplexity’s Comet browser for U.S. and some global users. It also introduced PayPal World for seamless global wallet interoperability. These initiatives strengthen its relevance in both e-commerce and offline retail while laying the groundwork for new revenue streams.
PayPal still faces challenges. While TPV rose 8.4%, payment transactions fell 4.5%. Engagement per user also slipped, with payment transactions per active account on a trailing 12-month basis declining 6.2% year over year. Still, excluding low-margin processing, engagement improved.
Compared to Block, PayPal operates on a larger global scale and has a stronger presence in branded checkout. However, its growth is steady rather than rapid. Investors who want a mix of stability, profitability and innovation may find PayPal’s improving fundamentals more attractive.
The Case for Block
Block’s third quarter was a story of strong gross profit growth and decent top-line performance. Net revenues increased 2.3% year over year to $6.11 billion, missing expectations, while the gross profit rose 18.3% to $2.66 billion, with Cash App rising 24.3% and Square increasing 9.2%. Adjusted operating income surged 8.3% year over year, with a margin of 18%, showing that scale and efficiency are starting to pay off.
Block’s strength lies in Cash App’s momentum. With $1.62 billion in gross profit, Cash App continues to serve as a financial hub for younger customers, expanding into P2P, commerce, banking and bitcoin.
The company introduced new products like Cash App Pools for group payments, Afterpay integrations and enhanced borrowing features, all deepening engagement. Cash App launched Tap to Pay on iPhone for Cash App Business sellers, enabling them to accept contactless payments. Meanwhile, Square announced enhancements to its conversational AI assistant, Square AI and launched Square Cash Advance in the U.K. to fund businesses. Together, these ecosystems reinforce Block’s ambition to be a comprehensive financial operating system.
Block faces some challenges along the way. Bitcoin plays an important role in Block’s revenue generation, but it makes the company’s performance volatile. Competition is tough, especially in consumer payments, where PayPal and other global players already have stronger networks with merchants. Although Block is very innovative, most of its growth is centered in the United States and depends heavily on Cash App’s younger users, making its reach smaller than PayPal’s global presence.
How Do Zacks Estimates Compare for PYPL & XYZ?
The Zacks Consensus Estimate for PayPal’s 2025 sales and EPS implies a year-over-year increase of 4.72% and 14.62%, respectively. EPS estimates have been trending northward over the past month.
Image Source: Zacks Investment Research
Meanwhile, the consensus estimate for Block’s 2025 sales calls for a year-over-year rise of 0.99%, while that for EPS suggests a 24.04% decline year over year. EPS estimates have also been trending southward over the past month.
Image Source: Zacks Investment Research
Valuation: PYPL vs. XYZ
From a valuation perspective, we note that PayPal shares are trading cheap, as suggested by the Value Score of A. However, Block shares are currently overvalued, as implied by the Value Score of D.
In terms of forward 12-month Price/Sales (P/S), PYPL stock is trading at 1.76X, below its three-year median, while Block is currently trading at 1.43X, which is also below its three-year median.
Image Source: Zacks Investment Research
Price Performance: PYPL vs. XYZ
Over the past three months, shares of PYPL have outperformed XYZ, while PYPL has underperformed the S&P 500 composite.
Image Source: Zacks Investment Research
Conclusion: PayPal Remains Strong
Both PayPal and Block reported strong third-quarter 2025 results, but their paths are different. PayPal shows it can grow steadily and profitably while also investing in next-gen commerce and global wallet connectivity. Block is very active in product innovation and keeping users engaged, but its earnings are more unpredictable. For investors choosing now, PayPal seems like a safer choice to buy because of its scale, profitability and resilience. Block is still valuable to hold because of its powerful ecosystems and long-term potential, but PayPal’s execution and global reach give it the edge right now. Estimate revisions and valuations also suggest the same.
Currently, PYPL has a Zacks Rank #3 (Hold), while Block carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.