What to Look for Before Buying a Fintech Stock

By Neil Patel – Apr 16, 2026 at 1:30PM ESTKey PointsInvestors might care about growth more than anything else, but profits shouldn’t be ignored. Valuation is another key variable to consider, even though some investors might not prioritize it as much in their decision-making process. There are many secular trends shaping our economy and affecting various industries. But one that's particularly exciting is the intersection of financial services and technology, an area that's home to several innovative businesses. Here's what you should look for before buying a fintech stock. Image source: Getty Images. Growth gets a lot of attention. Companies like Lemonade (LMND +4.30%), Nu Holdings (NU +0.55%), Robinhood Markets (HOOD 1.32%), SoFi Technologies (SOFI +1.38%), and Upstart (UPST +0.66%) shine. All five of these businesses registered at least 35% year-over-year revenue growth in 2025, with two of them posting above 50% growth. Investors shouldn't ignore profits. More established fintech players, like Block (XYZ +1.07%) and PayPal (PYPL +0.12%), have excelled in this area. Jack Dorsey-led Block expects to report a 26% adjusted operating margin in 2026. PayPal raked in $5.6 billion in free cash flow in 2025 on $33.2 billion in revenue. Valuation is another factor that can reveal the margin of safety, if any, that the market is giving investors. In fintech land, PayPal is a cheap opportunity, as its shares trade 84% below their peak (as of April 14) and now trade at a forward price-to-earnings ratio of 9.1. ExpandNASDAQ: PYPLPayPalToday's Change(0.12%) $0.06Current Price$49.63Key Data PointsMarket Cap$46BDay's Range$48.35 - $49.8452wk Range$38.46 - $79.50Volume8.1MAvg Vol24MGross Margin41.78%Dividend Yield0.56% When picking stocks for your portfolio, the smart approach is to incorporate all of these variables into your decision-making process. Some investors might care about growth above anything else. Others will prioritize profitability and a compelling valuation. What matters most is that you move forward with a strategy that fits your individual philosophy.Read NextApr 16, 2026 •By James BrumleyWhy Charles Schwab Stock Is Down TodayApr 16, 2026 •By Jennifer SaibilIs This Beaten-Down Financial Stock Finally Worth Buying?Apr 15, 2026 •By Motley Fool YouTubeToast (TOST): A Strong Contender in Restaurant TechApr 15, 2026 •By Eric VolkmanWhy Blue Owl Capital Stock Soared More Than 8% Higher TodayApr 15, 2026 •By Eric VolkmanWhy Morgan Stanley Stock Rocked the Market TodayApr 15, 2026 •By Josh Kohn-LindquistStock Market Today, April 15: Robinhood Markets Surges After SEC Eases Day Trading RulesAbout the AuthorNeil Patel is a contributing Motley Fool stock market analyst covering consumer staples, consumer discretionary, financials, information technology, and communication services. Prior to The Motley Fool, Neil worked in corporate finance roles at JPMorgan Chase and Capital One. He also has experience working on a start-up in the cryptocurrency space. He holds a bachelor’s degree in business administration with a specialization in finance from Ohio State University.TMFNeilPatelStocks MentionedPayPalNASDAQ: PYPL$49.63(+0.12%)+$0.06BlockNYSE: XYZ$68.70(+1.07%)+$0.73LemonadeNYSE: LMND$68.60(+4.16%)+$2.74UpstartNASDAQ: UPST$33.66(+0.90%)+$0.30SoFi TechnologiesNASDAQ: SOFI$19.05(+1.38%)+$0.26Robinhood MarketsNASDAQ: HOOD$86.35(-1.12%)-$0.98Nu HoldingsNYSE: NU$15.43(+0.55%)+$0.09*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.