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

SoFi Technologies (NASDAQ: SOFI) and PayPal Holdings (NASDAQ: PYPL) both raised their 2026 outlooks on Oct. 27, signaling renewed confidence in their growth prospects. But which stock has the better growth potential and makes the stronger case for buying the stock?

Let's start with the company adding customers at a record pace.

Image source: Getty Images.

An all-in-one financial app is driving SoFi's member growth

SoFi has been steadily building an all-in-one online financial services platform, and that strategy is starting to pay off.

Its third-quarter results showed strong growth in both its customer base and the number of products those customers use. The company added a record 1.2 million customers during the quarter, bringing its total to 17.1 million.

Customers are also using multiple products, giving the company more opportunities to generate revenue from each relationship. Its financial services business is expanding through products like SoFi Money, Invest, Relay, and its credit card offerings.

As a result, SoFi raised its 2026 outlook, increasing its adjusted net revenue forecast to about $5 billion and reaffirming its adjusted earnings-per-share (EPS) forecast of $0.61. More importantly, management also announced its 2027 outlook, targeting $0.90 in adjusted EPS, meaning not in accordance with generally accepted accounting principles (GAAP).

But the company still faces risks, as SoFi remains exposed to consumer credit conditions, loan defaults, and interest rate changes. Its ambitious strategy also requires significant investment, while competition could make customer acquisition more difficult.

Still, analysts see room for gains, with an average target price of $20.80, representing about 25% potential upside. Today, the stock trades at a forward price-to-earnings (P/E) ratio of about 19.6, which is a relatively reasonable valuation for a fintech company with solid growth ambitions. If management delivers on its earnings targets, the stock could offer plenty of gains.

Meanwhile, another fintech giant is taking a different approach to accelerate growth.

A global network and Venmo give PayPal room to grow

PayPal's biggest advantage is its established global network of consumers and merchants. Its branded checkout service remains widely recognized, while Venmo offers another avenue for growth, especially among younger consumers. The company is also expanding its presence in buy now, pay later (BNPL), mobile payments, and merchant services.

These days, results show that some of these initiatives are gaining traction. Venmo, for example, continues to deliver strong transaction growth, with increasing adoption of its debit card and Pay with Venmo features. Plus, Braintree, PayPal's unbranded payment processing business, is benefiting from growing transaction volumes as more merchants use the platform.

As a result, PayPal raised its 2026 non-GAAP EPS outlook to about $5.60, up from its previous forecast of roughly $5.38. This suggests that management is becoming more confident in its cost-efficiency initiatives and its ability to generate profitable growth. The company also expects to generate at least $6.5 billion in adjusted free cash flow (FCF) for the year, supporting its ongoing investment and shareholder return plans.

However, PayPal still faces challenges, as its branded checkout business is intensely competitive with Apple Pay, Google Pay, and other payment providers. Revenue growth also remains relatively modest, while the company needs to prove that its operational improvements can drive stronger top-line growth.

For now, the majority of analysts rate the stock a hold, with an average target price of $57.10, which implies only about 5% upside. It also trades at a forward P/E of just 9.7 times, as investors weigh the risks of its turnaround.

With SoFi and PayPal raising their outlooks, the question now is which stock offers the more compelling opportunity for investors.

Which fintech stock is the stronger buy?

Both SoFi and PayPal gave investors reasons to be optimistic after raising their 2026 forecasts. However, SoFi has a stronger growth case thanks to its expanding financial ecosystem, rising customer adoption, and ambitious earnings outlook for 2027. PayPal offers a potentially attractive turnaround opportunity, but it still needs to prove that its various initiatives can accelerate growth.

For growth-focused investors, SoFi is the higher-risk, higher-reward pick. PayPal is the safer option for value seekers, thanks to its low valuation. Both could appeal to buyers at current valuations, given the upward revisions to their outlooks.

Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends the following options: short December 2026 $62.50 calls on PayPal. The Motley Fool has a disclosure policy.