Affirm vs. Block: Which Fintech Stock Has More Growth Potential?

The fintech revolution has transformed how people spend, borrow and move money, thrusting companies like Affirm Holdings, Inc. AFRM and Block, Inc. XYZ into the spotlight. Both are pioneers in digital payments, appealing to younger, tech-savvy consumers with solutions that prioritize convenience and flexibility.

Affirm is becoming synonymous with the “buy now, pay later” (BNPL) wave, building partnerships with major merchants and embedding itself at checkout across industries. Block, meanwhile, has expanded well beyond its Square merchant roots, evolving into a diversified platform with Cash App, Afterpay and even Bitcoin exposure.

With the current interest rate environment, spending trends and rising competition shaping the sector, investors are asking: which stock offers more upside potential right now? Let’s break it down.

The Case for Affirm

Affirm has emerged as one of the fastest-growing names in fintech, and it is riding the acceleration in BNPL adoption. Its active consumers grew to 23 million as of June 30, 2025. Its partnerships with major retailers like Shopify, Costco and Amazon have anchored its role in e-commerce, while its expanding merchant base, now around 377,000 strong, provides a powerful growth engine. This vast reach ensures that Affirm is not just a niche player but a key facilitator in digital commerce.

Efficiency is also improving, with its AI-powered underwriting platform lowering delinquencies while widening access to more customers. In its latest quarter, gross merchandise volume (GMV) jumped 43% year over year to $10.4 billion, and BNPL transactions grew both in volume and frequency. Cross-category expansion into travel, lifestyle and small-ticket daily purchases are fueling repeat transactions (95% in the fourth quarter of fiscal 2025), which is critical for long-term sustainability.

Affirm’s balance sheet still needs strengthening, with a long-term debt-to-capital ratio of 71.8% (vs. Block’s 13.8%). Management is working to diversify funding and cut financing costs. Revenue is scaling quickly, giving Affirm room to progress toward sustainableprofitability. Total revenues jumped 33% year over year in the last reported quarter to $876 million.

Affirm Holdings, Inc. Price, Consensus and EPS Surprise

Affirm Holdings, Inc. price-consensus-eps-surprise-chart | Affirm Holdings, Inc. Quote

Competitive threats from PayPal Holdings, Inc. PYPL, Block and newly public Klarna remain significant, underscored by Walmart’s switch to Klarna from AFRM. Still, Affirm’s differentiated tech stack and high consumer engagement provide an edge. Expansion into Australia and Western Europe through its Shopify partnership further extends its runway. If Affirm can defend its market share while scaling globally, its growth potential looks robust.

The Case for Block

Block has long been a symbol of fintech disruption, starting with Square’s point-of-sale (POS) systems and later diversifying into Cash App, BNPL via its Afterpay acquisition, and Bitcoin-linked revenue streams. This diversification fuels growth but also exposes the company to volatility beyond core payments.

Cash App remains Block’s crown jewel, driving user growth and monetization through peer-to-peer transfers, investing and debit products. But rivals like PayPal’s Venmo and Zelle present challenges. Afterpay has expanded Block’s consumer ecosystem, but it has yet to deliver the kind of growth Affirm has achieved in the U.S. market.In the June quarterof 2025, its BNPL GMV reached $9.1 billion, up 17% year over year, trailing Affirm’s pace.

Block’s total net revenues slipped 2% year over year in the last reported quarter, primarily due to lower Bitcoin contributions, partially offset by higher subscription and services-based revenue growth. Block’s adjusted operating margin stood at 22%, compared with Affirm’s 27%. Looking ahead, for the full year 2025, XYZ expects an adjusted operating margin of 20%, while Affirm targets more than 26.1% in fiscal 2026. Unlike Affirm, which has a tighter focus on BNPL, Block’s broader portfolio understandably makes it more challenging to achieve efficiency gains across all its verticals.

Block, Inc. Price, Consensus and EPS Surprise

Block, Inc. price-consensus-eps-surprise-chart | Block, Inc. Quote

Debt levels are more manageable at Block than at Affirm, but the company’s risk profile is amplified by its crypto exposure. Its cash flow to invested capital, a measure of how efficiently it converts invested funds into cash, stands at 5.7%, trailing Affirm’s 7.7%. Block’s strength lies in diversification and scale, which help mitigate risk but also limit the “explosive” upside often seen earlier in the fintech lifecycle.

How Do Zacks Estimates Compare for AFRM & XYZ?

Analysts currently lean in Affirm’s favor. Over the past month, it has witnessed six upward estimate revisions against one opposite movement for the fiscal year 2026 earnings, which is pegged at 86 cents per share. The Zacks Consensus Estimate indicates 473.3% year-over-year growth. It beat earnings in each of the past four quarters with an average surprise of 105.5%. Revenues are projected to climb nearly 23.4% year over year, supported by both merchant expansion and repeat customer growth.

In contrast, the consensus estimate for XYZ’s fiscal 2025 earnings of $2.57 witnessed one upward and one downward movement over the past month. It indicates a 23.7% decline from the year-ago level of $3.37 per share. Over the past four quarters, it beat the earnings estimates once, met once and missed twice with an average surprise of negative 11.9%. Revenues are projected to climb only 2.1% in 2025.

Price Performance Comparison

Affirm shares have rallied 47.7% over the year-to-date period, a sign of investor confidence in its accelerating momentum. While volatility is part of the package with high-growth fintech names, this rally underscores Affirm’s strong positioning in BNPL. Block’s stock, meanwhile, has declined 10.9% over the same period as investors digest mixed signals from its diversified portfolio.

Price Performance – AFRM, XYZ, Industry & S&P 500

Valuation: AFRM vs. XYZ

Affirm currently trades at 7.03X forward price-to-sales, a premium that reflects its growth trajectory. While that may appear steep, investors are essentially paying for exposure to a high-growth category with years of runway ahead. Block, on the other hand, trades at a more modest 1.76X forward price-to-sales. In a market that rewards clear, high-growth stories, Affirm’s valuation premium makes sense.

Conclusion: The Better Growth Play

Both Affirm and Block are influential fintech players with compelling long-term stories. Block benefits from a diversified ecosystem and a large consumer base through Cash App, but its exposure to crypto-related risks, lower margins and weak earnings estimates create noise around its growth prospects.

Affirm, on the other hand, is a focused BNPL leader with strong merchant relationships, improving underwriting, and a clear path to scaling revenue. Its momentum, coupled with a fast-growing brand in a tech-savvy, consumer-friendly space, gives it more upside potential. With better earnings growth estimates and a more favorable efficiency level, Affirm offers a more compelling risk-reward profile now, even though the companies currently carry a Zacks Rank #3 (Hold) each.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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