Yahoo Finance·2026-02-04 21:25Industry Overview - Many fintech stocks have experienced significant declines due to inflation, high interest rates, and macroeconomic challenges, impacting industry growth [1] - Intense competition has made it difficult for smaller players to scale their businesses and improve margins [1] Investment Opportunities - The recent sell-off in fintech stocks may present a buying opportunity for long-term investors, particularly in companies like Upstart and Affirm, which have seen their stock prices drop approximately 90% and 60% from all-time highs, respectively [2] Company Profiles - Upstart operates an AI-driven online lending marketplace, utilizing non-traditional data points to approve loans, having originated over $50.4 billion in loans for more than 3 million customers [3] - Affirm offers buy now, pay later services to younger, lower-income consumers, serving 24.1 million active consumers and 419,000 active merchants, without charging compound interest or hidden fees [4] Growth Projections - Analysts project Upstart's revenue and adjusted EBITDA to grow at CAGRs of 20% and 35% from 2025 to 2027, while Affirm's revenue and adjusted EBITDA are expected to increase at CAGRs of 25% and 125% from fiscal 2025 to fiscal 2028 [6] Valuation Insights - Upstart has an enterprise value of $4.6 billion, trading at 13 times next year's adjusted EBITDA, while Affirm, valued at $24.7 billion, trades at 16 times next year's adjusted EBITDA, indicating both stocks may be undervalued relative to their growth potential [7]