Fintech
The 3 most undervalued Fintech stocks to buy in May 2024
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Why does everyone love investing in fintech companies? It’s probably because most of us can see how flawed the traditional financial system is. With fintech platforms we can carry out any banking activity or invest directly online without paying exorbitant fees from a big bank. They also allow us to expose ourselves to alternative financial assets like cryptocurrencies right in the palm of our hands.
So are fintech companies a good investment? Like every industry, it has its winners and losers. The platform must have good technology and offer benefits to move away from the security of a big bank. Here are three fintech companies that we think have a bright future and are worth buying in May.
Global Coinbase (COIN)
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Global Coinbase (NASDAQ:CURRENCY) is the largest cryptocurrency exchange in the United States. It has over 100 million registered users in more than 100 countries around the world. After the recent earnings report, Coinbase received some important updates from analysts. THE price target the range for COIN is $111.10 to $472.50, with an average price target of $249.69.
Even if you know nothing about cryptocurrencies, you will appreciate how well Coinbase works. The company has established itself as the industry standard for custodial security. It is the official custodian of Bitcoin spot ETFs. Coinbase also launched its Ethereum-based Layer-2 Base protocol, from which it collects transaction fees for transactions.
Coinbase is still trading at fairly high valuations, but the potential growth it will have over the next few years makes these multiples easier to digest. The shares are traded at 14.8 times sales and 56.5 times future earnings. With a five-year period income compound annual growth rate (CAGR) of 42%, Coinbase has plenty of room for growth at its inflated valuation.
PayPal (PYPL)
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PayPal (NASDAQ:PYPL) is an American payment services company founded in 1998 by a group that included Peter Thiel and Elon Musk. The stock has plummeted in recent years as growth has been slow but steady. Analysts have an average price target of $69.68 for the stock with a high price target of $111.80.
It’s hard to beat PayPal when it comes to transferring funds online. With over 300 million users in more than 200 different countries, PayPal is the most used online payment app in the world. Under the leadership of new CEO Alex Chriss, the company appears rejuvenated. Most recently, PayPal reported 10% growth in net revenue and a 14% increase in total payment volumes for the quarter.
PayPal has grown income with a CAGR of 14% and a net profit of 26% over the last 10 years. The shares trade at approx 2.3 times sales and 15.2x future earnings. While PayPal has been scrutinized by shareholders, these are attractive multiples to buy the stock given its growth trajectory. Chriss is still early in the company’s turnaround and is focusing on bringing more small and medium-sized businesses into the ecosystem.
Sea Ltd (SE)
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Sea Ltd (NYSE:SELF) is a Southeast Asian company that operates in several industries including e-commerce, fintech and mobile gaming. Analysts have a year price target range of $41.00 to $92.00 with an average price target of $72.46. This indicates the potential for an upside of around 10% from the current price.
This stock was once a favorite of growth investors, but has lost much of its value since the early 1920s. Sea relies on e-commerce site Shopee, mobile gaming business Garena and financial services division Seamoney. Seamoney offers users in Southeast Asia access to online payments, purchase financing and online banking. Through the ShopeePay mobile wallet, users can make direct purchases from thousands of global merchant partners.
Sea has focused on cutting costs and reinvesting in its Shopee platform. The shares trade at just 3x sales but investors await the return to consistent profitability. Despite this, analysts have raised their price targets for the stock anticipating a continued recovery from the company.
As of the date of publication, Ian Hartana and Vayun Chugh 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 Guidelines for publication.
Chandler Capital is the work of Ian Hartana and Vayun Chugh. Ian Hartana and Vayun Chugh are both self-taught investors whose work has been featured in Seeking Alpha. Their research primarily revolves around GARP stocks with a long-term investment perspective encompassing diverse sectors such as technology, energy, and healthcare.