PayPal, Block And Affirm Shares Are Spiraling Lower Wednesday: What's Going On?

Several fintech stocks including PayPal Holdings Inc PYPL, Block Inc SQ and Affirm Holdings Inc AFRM are getting rocked Wednesday. The weakness appears to be due to reports indicating a major payments company in France slashed its outlook. 

What Happened: According to a Barron's report, French payments company Worldline cut its guidance in a big way as the economic slowdown continues to weigh on sales and profitability. 

The company reportedly warned that consumers are cutting back on discretionary spending and only buying essential items like food and shelter. The report indicates Worldline shares tumbled nearly 60% in Paris and the news is impacting big fintech firms like PayPal and Block, which generate some of their revenues from Europe. 

Affirm appears to be up against additional selling pressure after it was downgraded by Compass Point. Analyst Giuliano Bologna downgraded the stock to Sell and set a price target of $13, citing higher interest rates and increasing concerns about the macro backdrop and consumer credit.

"We believe the risk of the environment remaining under pressure for a few more quarters is high," the analyst said in a new note to clients.

Bologna believes the chances for a positive GMV outlook surprise are low. Furthermore, a tougher loan sales environment could reduce gain on sale margins and front end economics, which could further pressure margins, the analyst said. 

PayPal is due to report earnings on Nov. 1. Block is scheduled to report the following day. Affirm will report its quarterly results on Nov. 8.

See Also: How Rapunzl Nurtures Financial Wellness On Campuses With Competitions And Prizes

PYPL, SQ, AFRM Price Action: At publication time, PayPal shares were down 5.22% at $51.42, Block shares were down 7.58% at $41.91 and Affirm shares were down 14.2% at $16.79, according to Benzinga Pro.

Photo: courtesy of PayPal.