2 Fintech Stocks to Buy After They Raised Their 2026 Forecasts in October

SoFi and PayPal both raised their 2026 outlooks on Oct. 27. SoFi added a record 1.2 million customers in the quarter, bringing its total to 17.1 million, and lifted its adjusted net revenue forecast to about $5 billion while reaffirming adjusted EPS of $0.61; it also targets $0.90 adjusted EPS in 2027. PayPal raised 2026 non-GAAP EPS guidance to about $5.60 from roughly $5.38 and expects at least $6.5 billion in adjusted free cash flow, but faces modest revenue growth; the article favors SoFi for higher growth potential while describing PayPal as a lower-valuation turnaround.

Analysis

The key distinction is earnings quality, not customer growth versus a low multiple. For SOFI, customer and product additions matter only if cohorts deepen product use and produce durable revenue after acquisition costs; otherwise the 2027 adjusted-EPS target risks becoming a credibility test rather than a catalyst. Its consumer-credit exposure also creates asymmetric downside if unemployment or delinquencies rise, while funding costs and lending demand can move with rates. For PYPL, EPS and free-cash-flow upgrades may reflect execution and capital returns, but volume growth is not enough: a mix shift toward lower-monetization processing could dilute revenue and margins even as transactions rise. Branded-checkout share and Venmo monetization are the more important proof points.

Near term, guidance revisions can support both, but the article offers no evidence that expectations or positioning are underpriced. Over 1–3 months, watch reported revenue per transaction, branded-checkout trends, credit performance, and reconciliation of adjusted earnings to GAAP cash generation. Over 6–18 months, SOFI's upside depends on repeatable cross-sell economics; PYPL's depends on stabilizing checkout monetization without sacrificing processing volume. Contrarian angle: PYPL's low multiple is not automatically a bargain if top-line conversion remains weak, while SOFI's growth narrative may obscure credit-cycle risk. No unconditional outright buy is warranted from these facts alone.

Key Decisions for Investors

• Avoid chasing SOFI solely on record customer additions. Treat cohort monetization, acquisition cost, credit losses, and the bridge from adjusted to GAAP earnings as required diligence before sizing a growth position.
• Put PYPL on a conditional value watch: consider a starter position only if branded-checkout trends stabilize and revenue growth converts to improved operating performance, rather than EPS improvement being driven mainly by cost actions or capital returns.
• For a relative-value expression, consider a small, risk-limited long PYPL / short SOFI pair only if upcoming data confirm PYPL's checkout stabilization while SOFI credit metrics deteriorate. This is a valuation-and-quality hedge, not a forecast that PYPL has superior long-run growth; cap risk because the exposures and growth profiles differ.
• Reassess after the next results and guidance updates. The thesis weakens if PYPL transaction growth continues without revenue or margin conversion; it is falsified on the SOFI-risk side if credit performance stays resilient and cross-sell meaningfully lifts revenue per customer. Monitor consumer delinquencies, employment, interest-rate moves, and each company's adjusted-to-GAAP earnings reconciliation.