Diversified Financial Services Stocks Q3 Teardown: Western Union (NYSE:WU) Vs The Rest

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the diversified financial services industry, including Western Union (NYSE:WU) and its peers.

Diversified financial services encompass specialized offerings outside traditional categories. These firms benefit from identifying niche market opportunities, developing tailored financial products, and often facing less direct competition. Challenges include scale limitations, regulatory classification uncertainties, and the need to continuously innovate to maintain market differentiation against larger competitors expanding their offerings.

The 10 diversified financial services stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 1.7% on average since the latest earnings results.

Western Union (NYSE:WU)

With a history dating back to 1851 when it began as a telegraph company, Western Union (NYSE:WU) is a global money transfer service that enables consumers and businesses to send funds across borders and currencies, typically within minutes.

Western Union reported revenues of $1.02 billion, down 1.3% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a beat of analysts’ EPS estimates but a slight miss of analysts’ Consumer Money Transfer segment estimates.

Western Union pulled off the highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 14% since reporting and currently trades at $9.28.

Is now the time to buy Western Union? Access our full analysis of the earnings results here, it’s free.

Best Q3: Paymentus (NYSE:PAY)

Founded in 2004 to simplify the complex world of bill payments, Paymentus (NYSE:PAY) provides a cloud-based platform that helps utilities, municipalities, and service providers automate billing and payment processes.

Paymentus reported revenues of $310.7 million, up 34.2% year on year, outperforming analysts’ expectations by 10.7%. The business had a stunning quarter with an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ EBITDA estimates.

Paymentus delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems content with the results as the stock is up 4% since reporting. It currently trades at $29.75.

Is now the time to buy Paymentus? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: NCR Atleos (NYSE:NATL)

Spun off from NCR Voyix in 2023 to focus exclusively on self-service banking technology, NCR Atleos (NYSE:NATL) provides self-directed banking solutions including ATM and interactive teller machine technology, software, services, and a surcharge-free ATM network for financial institutions and retailers.

NCR Atleos reported revenues of $1.12 billion, up 4.5% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates.

Interestingly, the stock is up 4.1% since the results and currently trades at $39.37.

Read our full analysis of NCR Atleos’s results here.

Donnelley Financial Solutions (NYSE:DFIN)

Born from the need to navigate increasingly complex financial regulations in the digital age, Donnelley Financial Solutions (NYSE:DFIN) provides software and technology-enabled services that help companies comply with SEC regulations and manage financial transactions and reporting requirements.

Donnelley Financial Solutions reported revenues of $175.3 million, down 2.3% year on year. This number beat analysts’ expectations by 3.3%. Overall, it was an exceptional quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

Donnelley Financial Solutions had the slowest revenue growth among its peers. The stock is up 2.2% since reporting and currently trades at $52.86.

Read our full, actionable report on Donnelley Financial Solutions here, it’s free.

WEX (NYSE:WEX)

Originally founded in 1983 as Wright Express to serve the fleet card market, WEX (NYSE:WEX) provides payment processing and business solutions across fleet management, employee benefits, and corporate payments sectors.

WEX reported revenues of $691.8 million, up 4% year on year. This result topped analysts’ expectations by 1.5%. Aside from that, it was a satisfactory quarter as it also logged a solid beat of analysts’ Account Servicing segment estimates but a slight miss of analysts’ Payment Processing segment estimates.

WEX had the weakest full-year guidance update among its peers. The stock is up 3.2% since reporting and currently trades at $159.02.

Read our full, actionable report on WEX here, it’s free.

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