Fintech
The 3 best stocks to capitalize on the unstoppable rise of fintech
Fintech stocks buying is our topic today. The financial technology (fintech) sector is experiencing a surge in growth, partly driven by technological advancements. As a result, the size of the global fintech market is small expected to increase from $340 billion in 2024 to $1.15 trillion by 2032. Such remarkable growth would translate to a compound annual growth rate (CAGR) of more than 16%.
So far in 2024, the benchmark S&P500 the index gained 15%. On the contrary, the widely followed one ARK Fintech Innovation ETF (NYSEARCA:ARKF) has underperformed, gaining just 2% year to date (YTD). This disparity suggests the potential for a catch-up in the fintech sector. That said, here are the top three fintech stocks to buy to take advantage of the sector’s rapid growth.
ADYEN (ADYEY)
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First on our list of fintech stocks to buy is Adyen (OTCMKTS:ADYEY), a global payment processing platform based in the Netherlands. The company facilitates online transactions, acting as a bridge between merchants and consumers.
In late April, Adyen released his Q1 2024 business update, showing impressive growth parameters. The company’s process volume reached €297.8 million, marking an increase of 46% year-on-year (YOY). Net revenues increased 21% year-on-year to €438 million.
Investors note that Adyen has been active in forming strategic partnerships. For example, Decathlon Hong Kong chose Adyen e’s Unified Commerce solution Prada SPA (OTCMKTS:PRDSF) has integrated Adyen’s platform into all of its retail channels. Besides, Adyen does collaborated with Nelly Solutions to digitize medical practices. He has too launched Tap to Pay on iPhone in Canada, allowing businesses to accept contactless payments directly on iPhone without additional hardware.
Despite these steps, Adyen shares are down more than 4% year to date. Meanwhile, the current valuation still appears high at 40.3 times future earnings and 19.8 times sales. Despite the decline in Adyen’s stock price, analysts expect a potential upside of around 43%. next 12 months. Therefore, interested readers can view a potential drop in the stock price as an opportunity to purchase Adyen shares.
Nu Holdings (NU)
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By disrupting the traditional financial landscape, Nu Holdings (NYSE:NU) is the next name among today’s fintech stocks to buy. The digital banking platform operates primarily in Brazil, Mexico and Colombia. Nu offers an app that allows customers to open accounts, manage finances, make payments and invest from their smartphones.
Most of the management Nu recent quarterly earnings showcased the company’s strong performance and growth trajectory. Revenue totaled $2.74 billion for the first quarter of 2024, marking a 64% year-over-year increase, while adjusted net income was $443 million.
Investors are pleased that Nubank, a subsidiary of Nu Holdings, has done so exceeded 100 million customers in Brazil, Mexico and Colombia, becoming the first digital banking platform outside of Asia to reach this milestone. Furthermore, it was recently introduced cryptocurrency transfer functionalityfurther improving its service offering.
So far in 2024, NU stock is up more than 50%. The stock trades at a forward price-to-earnings (P/E) ratio of 27.1x and a price-to-book (P/B) ratio of 8.2x. Wall Street has one 12 month median price forecast of $12.80 for NU, implying 7% upside potential.
PayPal (PYPL)
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We conclude today’s exploration of the top fintech stocks to buy PayPal (NASDAQ:PYPL). A pioneer in online payments, PayPal operates a global digital payments platform, facilitating transactions between individuals and businesses. PayPal has also expanded into cryptocurrency transactions, allowing users to buy, hold and sell cryptocurrencies within their accounts. Recently, PayPal he announced PYUSD (PYUSD-USD), its own stablecoin, on Solana (SOL-USD) blockchain.
In the first quarter of 2024, PayPal he delivered a solid performance. Revenue grew 10% year-over-year on a currency-neutral basis to $7.7 billion. Adjusted net income increased 13% year over year to $1.5 billion, with diluted net income per share growing 20% to $1.40. The company’s strong performance came from branded coffers, large enterprises and international markets.
Since January, PYPL stock has fallen nearly 3% year to date. PayPal’s shares subsequently came under some pressure Apple (NASDAQ:AAPL) unveiled new features, including Wallet’s Tap to Cash. Meanwhile, PayPal stock currently trades at a favorable valuation of 14 times forward earnings and 2.1 times sales. Analysts are optimistic, setting a 12 month price target of $75 for PYPL. Such a potential increase would suggest a 25% upside, underscoring confidence in PayPal’s growth prospects.
As of the date of publication, Tezcan Gecgil did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com’s Publishing Guidelines.
Tezcan Gecgil, PhD, began contributing to InvestorPlace in 2018. He brings over 20 years of experience in the US and UK and has also completed all 3 levels of the Chartered Market Technician (CMT) exam. Publicly she contributed to investing.com and the UK website of The heterogeneous madman.