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Just For You Capital One Stock Weak After Earnings, Brex Deal in FocusAuthor: Chris Markoch. Article Posted: 1/29/2026. 
At a Glance - Capital One stock fell 6% after earnings despite revenue beating expectations.
- The Brex deal expands Capital One’s payments strategy but adds near-term risk.
- Technical indicators suggest COF may be forming a buy-the-dip setup.
Capital One Financial (NYSE: COF) stock is down roughly 6% one week after the bank's earnings report on Jan. 22. For the fourth quarter of 2025, the company reported $15.62 billion in revenue, topping expectations of $15.49 billion. However, earnings per share of $3.86 missed estimates of $4.14. From a valuation standpoint, the selloff in COF shares appears understandable. Even after the decline, Capital One trades at a price-to-earnings (P/E) ratio of more than 74x — a meaningful premium to its historical average and well above the typical multiple for financial stocks. Still, both the top line and bottom line improved year over year in the fourth quarter: EPS rose 24% and revenue jumped 53% from the prior year. That growth suggests Capital One is in an expansionary phase that could continue into 2026. Some investors felt that momentum was already priced into COF shares heading into the report. But another potential catalyst may be emerging. Capital One to Acquire Brex Alongside its earnings, Capital One announced it will acquire Brex Inc., a privately held financial services and payments startup, for $5.15 billion. The consideration will be split roughly 50% stock and 50% cash, and the deal is expected to close in the second quarter of 2026. Brex provides services for corporate cards, expense management and rewards programs. The company primarily targets startups and other businesses that often struggle to gain attention from traditional corporate providers like American Express (NYSE: AXP). With a customer base that includes Robinhood Markets (NASDAQ: HOOD) and Intel Corp. (NASDAQ: INTC), Brex has amassed more than $13 billion in deposits. According to chief executive officer Richard Fairbank, the deal fits the company's long-term plan "to build a payments company that sits at the frontier of the technology revolution." Acquiring Brex, rather than partnering with it, differentiates Capital One's approach from other banks that rely on partnerships to compete with nimble fintechs. The Deal Is Not Without Risk Investors may be wary of Capital One's acquisition appetite. The Brex deal comes less than a year after the company's acquisition of Discover Financial for $35 billion. Notably, the transaction could give Capital One the scale to better compete with Visa (NYSE: V) and Mastercard (NYSE: MA). It also appears unlikely to materially alter the company's debt profile. Execution — already critical following the Discover acquisition — becomes even more important now. Brex reached its peak valuation in 2023 after receiving large deposits from technology companies that fled Silicon Valley Bank. Since then, rising interest rates have dampened demand, enabling Capital One to buy Brex for less than half its peak valuation. COF Stock Looks Like an Attractive Buy-the-Dip Candidate The post-earnings price action in COF stock reads like investors selling first and asking questions later. The share price is trading within about 10% of its 60-day low, a level that has acted as support over the past six months. Analysts assign COF a consensus price target of $274.70, implying roughly 24% upside from the stock's price as of this writing. Importantly, the stock is showing signs of bouncing from oversold territory based on momentum indicators such as the MACD and the relative strength index (RSI). 
Investors considering a position may look to get involved below the company's current 20-day simple moving average (SMA), which has acted as a key resistance level over the last six months.
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