The payments space offers contrasting investment opportunities with two stocks, Zip Co Ltd (ASX: ZIP) and Block Inc (ASX: XYZ). Both enterprises are in digital payments and buy now, pay later (BNPL) businesses.
But they are valued differently and have different earnings on the stock market in recent times. These differences are significant when considering the sustainable profitability and growth within ASX fintech stocks.
Zip was established in 2013 and offers credit at the point of sale with its various products such as Zip Money and Zip Pay. It has operations in 12 countries, including Australia and New Zealand.
Block (Square) caters to merchants via payment solutions and consumers via Cash App. It acquired Afterpay in 2022, adding to its BNPL presence. Block’s shares on the ASX and Zip Co’s shares must be evaluated in light of the different business models.
Zip Co Shares: Profitability And Valuation
Exposure to digital credit and consumer payment services through Zip. Its financial metrics suggest a company that is seeking to be profitable and is being undervalued in a few valuation areas compared to Block. But the year-to-date loss is a concern for investors and their expectations of future growth.
Zip’s portfolio today is led by these key players:
- Market capitalisation: $2.58 billion.
- P/E ratio: 22.63.
- Earnings per share: $0.091.
- Dividend yield: 0.00%.
- Year-to-date return: -37.7%.
The lower P/E of Zip might be attractive for those looking for more affordable earnings valuations. But a lower multiple doesn’t necessarily mean a stock is undervalued. Investors need to look at earnings quality, credit performance and sustainable profitability.
The price of a zip closed at $2.07 on 2 October 2026, up 3.5% from the previous day. The stock, however, was still 37.7% off year-to-date. Given the difference between the two, it is important to note that this is a short-term movement, which should not be confused with longer-term performance.
Zip combines a lower reported P/E ratio with a significant year-to-date decline, highlighting its recovery challenge. [WSJ]
Block Shares ASX: Growth Expectations And Valuation
Block provides a more comprehensive payments system, including merchant services, peer-to-peer transfers and digital commerce solutions. It has also taken up more BNPL through its acquisition of Afterpay. This diversified structure offers opportunities for growth, but it is important to note that implementation and profitability will be key.
But the financials that Block has reported offer a different investment scenario:
- Market capitalisation: $4.21 billion.
- P/E ratio: 132.23.
- Earnings per share: $0.560.
- Dividend yield: 0.00%.
- Year-to-date return: 9.0%.
The key difference between the two is Block’s size, as compared to Zip, with its larger market cap. The stock has a P/E ratio of 132.23, which is significantly higher than the average. Investors will thus bid a considerable premium for its earnings foundation and expected growth.
Block shares closed at $106.62 on 2 October 2026, rising 0.7% that day. It has performed 9.0% year to date, as opposed to a negative return in Zip. But past success doesn’t guarantee future success.
Zip Vs Block: What The Numbers Reveal
The comparison shows what the various trade-offs are for investors looking at ASX fintech stocks. Block has had a higher multiple in terms of earnings and was the better performer in share price, while Zip reports a lower multiple.
| Metric | Zip | Block |
| Market capitalisation | $2.58 billion | $4.21 billion |
| P/E ratio | 22.63 | 132.23 |
| Earnings per share | $0.091 | $0.560 |
| Dividend yield | 0.00% | 0.00% |
| Year-to-date return | -37.7% | 9.0% |
Block has beaten Zip in the momentum race over the past year. Nevertheless, it’s undervalued, which boosts expectations of future earnings. Zip will have to prove that profitable gains can lead to investor confidence again.
P/E ratios should be used with care as comparisons may be affected by a variety of reporting periods and accounting methods. The figures provided by themselves cannot establish the intrinsic values of either company.
What Zip And Block Must Prove Next
The valuation of the businesses will rely on the sustainability of the financial results that both businesses can achieve in the future. There are a number of factors that investors must watch:
- Zip: Show consistent performance and improved financial results.
- Block: Outperform to justify its relatively high P/E ratio.
- Both companies: Control of operating costs, competition and credit risk.
- Investors: Review financial information in conjunction with valuations and market sentiment.
Looking at the past trends based on the provided data, Block looks better in terms of momentum. It has a wider payments platform and exposure to Afterpay that can drive its growth. Its valuations, however, make the impact of poor performance higher.
The lower P/E ratio might appeal to value investors at Zip. However, the year-to-date loss of performance suggests that there is still a need for a solid recovery. Both companies don’t currently pay a dividend as per the data provided, so the main factor of comparison is capital appreciation.
When investors are comparing Zip Co shares to Block shares on the ASX, they need to consider their level of risk and their expectations for earnings. Block has negative momentum, whereas Zip has a lower reported earnings multiple. Neither benefit guarantees better returns on investment in the future.
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Frequently Asked Questions
Q1: What is the difference between Zip and Block?
A2: Zip’s stock trades at a P/E ratio of 22.63, while Block’s is 132.23. There was also better YTD performance from Block.
Q2. What is the reason for Block’s P/E ratio being higher?
A2: It is undervalued given its reported earnings. Investors will need to determine if future growth is able to justify this premium.
Q3. Do Zip and Block pay dividends?
A3: The dividend yield is 0.00% for both. Investors are thus mainly relying on capital growth potential.
Q4: Which fintech stock was the better performer?
A4: Block was up 9.0% YTD, with Zip down 37.7%. This difference is not always seen as a guarantee that future performance will be the same.
Disclaimer
The information provided in this article is for informational purposes only and is not intended to be a form of financial advice. Figures are based on the provided source material and share price on 2 October 2026. Markets, valuations and company fundamentals are subject to change. Investors are advised to check the latest announcement to the ASX, financial statements and reporting periods prior to making investment decisions. There are no guarantees in regard to returns from past performance.
Luke Carlino is a seasoned Copywriter, Content Strategist, and Social Media Manager specialising in Mining, Finance, and Business journalism. With more than a decade of industry experience, he brings rigorous editorial standards and commercial acuity to every project.
