Fintech
3 Fintech stocks worth betting on in May
These are the fintech stocks to buy to make the most of the transition towards digitalisation
With better-than-expected inflation reports, the market is looking ahead. Earnings season has been excellent and at least one rate cut is expected this year. This could boost consumer spending and fintech organizations are set to benefit, so now is a great time to consider fintech stocks buy.
The sector has grown in recent years. As consumer preferences shift from cash to card and users begin to opt for financial apps and digital payments, these three companies will experience impressive growth.
The future is fintech and if you’re looking for fintech stocks to invest in this month, these are the top three. These stocks are in correction mode despite reporting impressive fundamentals, and the decline is an opportunity to accumulate. Let’s take a look at three fintech stocks to buy.
PayPal (PYPL)
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American payment service provider PayPal (NASDAQ:PYPL) did not go smoothly. PYPL stock has moved sideways over the past year and today trades for $64. It has gone from $50 to $64 since October 2023. The stock has fallen from an all-time high of $308 and may not reach there soon, but will tank during the decline it is intelligent.
That of the company first quarter results they were impressive and showed profitable growth. Revenues reached $7.7 billion, up 10%, while EPS stood at $1.08 per share. It ended the quarter with a cash balance of $17.7 billion.
Despite the high interest environment, the 14% increase in total payment volume demonstrates that PayPal has become indispensable for several organizations globally. It has delivered impressive growth, and an interest rate cut could benefit the company significantly.
The future is digital, and the long-term growth of e-commerce with digital payments will help PayPal grow. The stock will see a strong upside as the company continues to consistently grow revenue and revenue in the coming quarters. Over a dozen analysts upgraded their price target following the results.
Block (QS)
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To block (NYSE:m2) is a millionaire producer who today trades shares at $73. It has risen 25% over the past six months and reached $85 in March, but has lost value since then. However, it was trading as high as $278 in February 2021 and is nowhere near this high.
Several corporate developments helped the stock rise. The results were better than expected first quarter results with revenue growth of 19% reaching $5.96 billion, driven by Cash App. It is one of the strongest growth drivers and contributed $1.26 billion to gross profit. Net profit was $472 million, with a 6% increase in gross payment volume to $54.43 billion.
The addressable market for Cash App is expanding, which means revenue growth will remain steady. Block has become much more than just a payments company with this app. It has 57 million monthly transactions, which means users have at least one financial transaction in Cash App.
The company has made significant progress over the years and reported quarterly GAAP net income last quarter. While this is a federal investigation, which could impact the stock, long-term investors need not worry. The company’s positioning in the sector and solid fundamentals make it a stock to buy and hold.
SoFi (SOFI)
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I banged on the table SoFi (NASDAQ:SOFI) for a while now. The company reported stellar results but it didn’t help the stock rise. Trading at $7 today, the stock has gone from $6 to $10 in the last six months. Although it has grown 36% in the last 12 months, it appears highly undervalued.
The all-digital finance business saw significant growth in member rates and ended the first quarter with 8.5 million members. Membership increased 35% year over year. SoFi’s financial services segment grew 54% and is also its fastest growing segment. Management expects a slowdown in the credit sector, which remains under pressure due to the high rate environment.
It also reported a second quarter with positive net income, and if the company can continue to grow at the same pace, it could have a full year of positive net income. Management is targeting a 15% net revenue increase in the second quarter.
It has exceeded expectations for the last two quarters and could continue with the same momentum for the rest of the year. With a bullish outlook, SOFI stock looks very promising.
As of the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Guidelines for publication.
Vandita Jadeja is a freelance financial accountant and copywriter who loves reading and writing about stocks. She believes in buying and holding long-term gains. Her knowledge of words and numbers helps her write clear stock analyses.