Fintech
Is Global Payments Inc. (GPN) a good Fintech stock to buy right now?
We recently compiled a list of The 10 best Fintech stocks to buy now. In this article, we’ll take a look at where Global Payments Inc. (NYSE:GPN) compares to other fintech stocks. If interested you can also read our piece on The 12 best financial and fintech ETFs to buy.
Fintech services have become an integral part of our lives in recent years, significantly changing the financial sector. Consumers no longer need to queue at banks to get their bank statements, be involved in money transfers or carry heavy wallets to pay for groceries only in cash. Mobile banking, credit cards and digital wallets have revolutionized the way people manage their finances.
Global fintech industry
A report released in May last year by the Boston Consulting Group (BCG) predicts that the fintech sector will grow more than sixfold to reach a size of $1.5 trillion by 2030, from the current level of $245 billion. The financial services sector’s share is also expected to rise from 2% to 7% during this period, with Asia-Pacific set to overtake the US to become the world’s largest fintech market.
The fintech sector in Asia-Pacific is set to grow 27% between now and then, with China, India and Indonesia leading the pack due to their sizable unbanked populations and the large number of small businesses in these countries . However, North America, particularly the United States, will continue to remain a critical market and drive innovation in the industry. The market is also expected to grow significantly in the emerging economies of Latin America and Africa.
That said, although the market is expected to grow in the coming years, 2023 was a difficult year compared to the boom of previous years. According to KPMG, it was the slowest year in the global fintech sector since 2017, with approx 114 billion dollars of investments worldwide through 4,547 agreements. Financial experts say high inflation and ongoing military conflicts in Ukraine and the Middle East have led investors to become cautious in their spending.
The decline in fintech investment was noted across various regions, with Asia-Pacific seeing the biggest drop, falling from $51 billion in 2022 to just under $11 billion in 2023. Investment also halved in Europe, the Middle East and Africa, from $49.6 billion to $24.5 billion. . In the Americas, investment slowed 22% during the period. For 2024, US ratings agency Fitch Rating forecasts mixed results for fintech companies in North America and Europe, with expected revenue growth, but EBITDA margins likely to remain modest.
The story continues
Rise of Artificial Intelligence in Fintech
Generative artificial intelligence, or Gen AI, has taken much of the global financial services industry by storm. According to McKinsey, the technology is likely to add between $200 billion and $340 billion to the market over the next few years. Fintech companies are actively keeping up with the trend and making sure they adapt to both the capabilities and risks of Gen AI. Between 2022 and 2023, the share of fintech companies that improved their AI capabilities increased from 30% to 70%. On the other hand, around 90% of fintech companies surveyed in March this year by McKinsey said they had established centralized Gen AI functions. According to experts, the use of this technology is set to make fintech companies more agile and efficient in the coming years.
Methodology
Insider Monkey’s database of 920 hedge funds was evaluated as of the first quarter of 2024. We chose the 10 best fintech stocks to buy now based on hedge fund sentiment towards each stock. Stocks are ranked in ascending order by hedge fund holders in each company.
Why are we interested in the stocks that hedge funds are piling into? The reason is simple: Our research has shown that we can outperform the market by imitating the best stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A payment terminal in action with customers beyond the experience.
Global Payments Inc. (NYSE:GPN)
Number of hedge fund owners: 52
Next up is Global Payments Inc. (NYSE:GPN), an American fintech company that offers payment services to merchants, suppliers and buyers. In 2021, it was named among the Fortune 500 companies and currently ranks 410th on the list. Earlier this month, Zacks Equity Research named Global Payments Inc. (NYSE:GPN) a High Value Stock.
Last year, the company generated revenue of $9.78 billion, with EBITDA of $4.17 billion and diluted earnings per share (EPS) of $5.03. Global Payments Inc. (NYSE:GPN) is not only among the best fintech stocks to buy now, but also made Insider Monkey’s list of stocks 10 Best Digital Payment Stocks to Buy Now.
Overall GPN ranks 9th on our list of the best fintech stocks to buy. You can visit The 10 best Fintech stocks to buy now to see other fintech stocks that are on hedge funds’ radar. While we recognize the potential of GPN as an investment, our belief lies in the belief that AI stocks are more promising in delivering higher returns, and doing so in a shorter time frame. If you’re looking for an AI stock that’s more promising than GPN but trades at less than 5 times its earnings, check out our report on cheapest AI shares.
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Disclosure: None. This article was originally published on Indoor monkey.