Klarna’s high-profile IPO has made fintech cool again: PayPal, Block, and Affirm could be among the biggest beneficiaries
The long-awaited initial public offering (IPO) of Klarna Group (NYSE: KLAR), one of Europe’s leading buy-now-pay-later (BNPL) firms, has reenergized the fintech sector. Klarna priced its IPO at $40 per share, which was higher than its initial target, and opened trading on September 10 at a 30% premium of $52. This klarna ipo is set to reshape the market dynamics.
As we approach the one-month anniversary of Klarna’s IPO, the stock has given back that premium, but still trades around $42. That’s an impressive feat and could indicate that there is strong demand for fintech stocks after a multi-year correction attributed to higher interest rates and tighter credit conditions that pressured earnings.
Investors are closely watching the klarna ipo as it could signal a new era for fintech investments.
If that’s the case, there is a trio of names that are peers of Klarna but are already profitable, have diversified offerings, and are positioned to capture growth from digital commerce and embedded finance trends.
Reclaiming Its Role as the Fintech Standard-Bearer
Perhaps illustrating the renewed interest in fintech stocks, PayPal Holdings Inc. (NASDAQ: PYPL) stock is up approximately 5% in the last 30 days. But despite this move, the stock is still down about 15% in 2025. If the stock made that 15% gain it would still be slightly below its consensus price target of $84.50, which is an 18% gain from its current level.
After several years of sluggish growth and margin pressure, the company’s turnaround strategy under CEO Alex Chriss is beginning to show results. PayPal is focusing on operational efficiency, product innovation, and shareholder returns, including a new $5 billion buyback authorization.
The company’s Venmo platform continues to expand its utility, and PayPal’s branded checkout remains one of the most trusted payment methods for online merchants. With new initiatives in AI-driven fraud detection and digital wallet personalization, PayPal is positioning itself for long-term competitiveness. The stock trades at a significant discount to its historical valuation, with a forward P/E ratio around 14, which is in line with the company’s projected earnings growth of approximately 12%.
Building the Next Generation of Digital Finance
Block Inc. (NYSE: XYZ) stock is also up about 5% in the last week. The company, which was formerly known as Square, blurs the lines between commerce, banking, and cryptocurrency. The company operates as two business units: Seller for merchants and Cash App for consumers.
Block’s basic premise is that it services smaller merchants that need e-commerce solutions that larger players may ignore. It also serves consumers with minimal banking needs. It’s also focusing more on Bitcoin-related projects, which its target audience may lean into. But it could turn off larger investors. The company’s long-term growth requires that it grow its user base. More revenue will help the company expand its margins.
To that end, Block believes it has a significant unmet total addressable market (TAM). Lower interest rates could help that. Analysts seem to agree with several higher price targets coming in before the company reports earnings in November.
Riding the BNPL Wave Back Into Favor
Affirm Holdings Inc. (NASDAQ: AFRM) is the closest stock in this group, which you can say is a comparison to Klarna. However, the halo effect hasn’t emerged yet. AFRM stock is down 13% in the last 30 days, and it hasn’t enjoyed the bounce in the space.
With the stock up 24% in 2025, even after the pullback, this could just be a case of profit-taking. The stock has a lofty valuation at over 700x earnings. However, after the pullback, the stock is now about 8% below its consensus price target, and analysts are aggressively raising their price targets on the stock.
Affirm has built strong relationships with merchants such as Amazon, Shopify, and Walmart, giving it a sizable share of online installment payments. After struggling with rising credit losses in 2022–2023, Affirm has improved its risk management and expanded its recurring revenue through partnerships and its virtual card offerings.
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