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

What Happened?

A number of stocks jumped in the afternoon session after investors rotated out of tech names to capitalize on attractive relative valuations. 

Market analysts noted that while technology remained a long-term theme, the immediate growth story was shifting toward sectors that lagged the AI-driven run-up.As high-growth tech names faced profit-taking, capital flowed into banks and asset managers viewed as offering more defensible earnings multiples in the current climate. The move reflected a classic pivot, in which traders lock in gains from volatile innovators and redeploy them into the "value" side of the market to maintain exposure while reducing risk.The positive mood was supported by a Goldman Sachs forecast that projected U.S. economic growth would accelerate to 2.6 percent in 2026. This outlook was based on expectations of tax cuts, easier financial conditions, and a reduced economic drag from tariffs.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Investment Banking & Brokerage company Perella Weinberg jumped 3.2%. Is now the time to buy Perella Weinberg? Access our full analysis report here, it’s free.
• Diversified Financial Services company WEX jumped 3%. Is now the time to buy WEX? Access our full analysis report here, it’s free.
• Diversified Financial Services company Donnelley Financial Solutions jumped 3.3%. Is now the time to buy Donnelley Financial Solutions? Access our full analysis report here, it’s free.

Zooming In On Donnelley Financial Solutions (DFIN)

Donnelley Financial Solutions’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 2 days ago when the stock gained 5% on the news that investors shrugged off geopolitical tensions in Venezuela to push the S&P 500 and Dow Jones Industrial Average to new all-time highs. The rally was spearheaded by a resurgence in the "Magnificent Seven" and artificial intelligence sectors, with Amazon and Micron Technology posting significant gains. Market sentiment was fueled by a dual engine: "AI enthusiasm" approaching a fever pitch and expectations for a "hot" economy in 2026, supported by anticipated rate cuts and fiscal stimulus. This robust environment allowed both high-growth tech stocks and cyclical sectors to advance simultaneously.

Donnelley Financial Solutions is up 11.5% since the beginning of the year, but at $50.86 per share, it is still trading 26.6% below its 52-week high of $69.32 from February 2025. Investors who bought $1,000 worth of Donnelley Financial Solutions’s shares 5 years ago would now be looking at an investment worth $2,854.

What Happened?

A number of stocks jumped in the afternoon session after investors rotated out of tech names to capitalize on attractive relative valuations. 

Market analysts noted that while technology remained a long-term theme, the immediate growth story was shifting toward sectors that lagged the AI-driven run-up.As high-growth tech names faced profit-taking, capital flowed into banks and asset managers viewed as offering more defensible earnings multiples in the current climate. The move reflected a classic pivot, in which traders lock in gains from volatile innovators and redeploy them into the "value" side of the market to maintain exposure while reducing risk.The positive mood was supported by a Goldman Sachs forecast that projected U.S. economic growth would accelerate to 2.6 percent in 2026. This outlook was based on expectations of tax cuts, easier financial conditions, and a reduced economic drag from tariffs.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Student Loan company Nelnet jumped 4.3%. Is now the time to buy Nelnet? Access our full analysis report here, it’s free.
• Personal Loan company LendingClub jumped 4.4%. Is now the time to buy LendingClub? Access our full analysis report here, it’s free.
• Specialty Finance company Capital Southwest jumped 3.4%. Is now the time to buy Capital Southwest? Access our full analysis report here, it’s free.
• Asset Management company Ares jumped 3.8%. Is now the time to buy Ares? Access our full analysis report here, it’s free.
• Diversified Financial Services company NCR Atleos jumped 4.9%. Is now the time to buy NCR Atleos? Access our full analysis report here, it’s free.

Zooming In On NCR Atleos (NATL)

NCR Atleos’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 5 months ago when the stock gained 5.1% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. 

Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.

NCR Atleos is up 8.4% since the beginning of the year, and at $40.34 per share, has set a new 52-week high. Investors who bought $1,000 worth of NCR Atleos’s shares at the IPO in October 2023 would now be looking at an investment worth $1,754.

What Happened?

A number of stocks jumped in the afternoon session after investors shrugged off geopolitical tensions in Venezuela to push the S&P 500 and Dow Jones Industrial Average to new all-time highs. 

The rally was spearheaded by a resurgence in the "Magnificent Seven" and artificial intelligence sectors, with Amazon and Micron Technology posting significant gains. Market sentiment was fueled by a dual engine: "AI enthusiasm" approaching a fever pitch and expectations for a "hot" economy in 2026, supported by anticipated rate cuts and fiscal stimulus. This robust environment allowed both high-growth tech stocks and cyclical sectors to advance simultaneously.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Asset Management company TPG jumped 3.4%. Is now the time to buy TPG? Access our full analysis report here, it’s free for active Edge members.
• Credit Card company Bread Financial jumped 4.9%. Is now the time to buy Bread Financial? Access our full analysis report here, it’s free for active Edge members.
• Diversified Financial Services company Donnelley Financial Solutions jumped 5%. Is now the time to buy Donnelley Financial Solutions? Access our full analysis report here, it’s free for active Edge members.
• Credit Card company Capital One jumped 2.9%. Is now the time to buy Capital One? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Donnelley Financial Solutions (DFIN)

Donnelley Financial Solutions’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was about 2 months ago when the stock gained 4.9% on the news that investors grew more optimistic about a potential Federal Reserve interest rate cut in December. 

The positive sentiment was fueled by comments from New York Fed President John Williams, a voting member of the rate-setting Federal Open Market Committee, who stated the central bank could cut rates "in the near term" without jeopardizing its inflation targets. Following his remarks, market expectations for a rate cut in December shifted significantly. According to the CME FedWatch Tool, the probability of a December rate reduction surged from a 37% chance earlier in the day to 70%. While lower rates can compress bank profit margins, investors often view them as a catalyst for broader economic activity, potentially boosting loan demand and reducing the risk of defaults.

Donnelley Financial Solutions is up 9.8% since the beginning of the year, but at $50.12 per share, it is still trading 27.7% below its 52-week high of $69.32 from February 2025. Investors who bought $1,000 worth of Donnelley Financial Solutions’s shares 5 years ago would now be looking at an investment worth $2,711.

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how diversified financial services stocks fared in Q3, starting with NerdWallet .

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 3% on average since the latest earnings results.

NerdWallet

Born from founder Tim Chen's frustration with the lack of transparent credit card information when helping his sister in 2009, NerdWallet is a digital platform that provides financial guidance to help consumers and small businesses make smarter decisions about credit cards, loans, insurance, and other financial products.

NerdWallet reported revenues of $215.1 million, up 12.4% year on year. This print exceeded analysts’ expectations by 5.4%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ revenue and EPS estimates.

Interestingly, the stock is up 20.2% since reporting and currently trades at $14.41.

We think NerdWallet is a good business, but is it a buy today? Read our full report here, it’s free for active Edge members.

Best Q3: Paymentus

Founded in 2004 to simplify the complex world of bill payments, Paymentus 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 a solid beat of analysts’ revenue estimates and an impressive beat of analysts’ EBITDA estimates.

Paymentus achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 7.4% since reporting. It currently trades at $30.74.

Weakest Q3: NCR Atleos

Spun off from NCR Voyix in 2023 to focus exclusively on self-service banking technology, NCR Atleos 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 2.1% since the results and currently trades at $38.60.

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

Donnelley Financial Solutions

Born from the need to navigate increasingly complex financial regulations in the digital age, Donnelley Financial Solutions 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 surpassed analysts’ expectations by 3.3%. Overall, it was an exceptional quarter as it also produced 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 down 12.2% since reporting and currently trades at $45.41.

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

PayPal

Originally spun off from eBay in 2015 after being acquired by the auction giant in 2002, PayPal operates a global digital payments platform that enables consumers and merchants to send, receive, and process payments online and in person.

PayPal reported revenues of $8.42 billion, up 7.3% year on year. This print beat analysts’ expectations by 2.2%. It was a very strong quarter as it also put up a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ transaction volumes estimates.

The stock is down 13% since reporting and currently trades at $61.26.

Read our full, actionable report on PayPal here, it’s free for active Edge members.