Fintech
Wall Street Favorites: 3 Fintech Stocks With Strong Buy Ratings for June 2024
Despite recent market fluctuations, fintech stocks they remain promising investments with the potential to deliver solid returns to investors. These companies are revolutionizing the way we transact and think about money, including the rise of cryptocurrencies such as Bitcoin (BTC-USD).
To take advantage of these fundamental shifts, I researched three fintech stocks that offer an attractive trade-off between risk and reward. Often overlooked by the financial media, these hidden opportunities have received strong buy ratings from analysts, signaling significant growth potential.
The decline in interest rates expected throughout 2024 and 2025 will benefit fintech companies by stimulating economic growth and increasing market liquidity. This environment is favorable for fintech stocks, especially those with innovative solutions and solid business models.
Here are three fintech stocks to buy for June 2024, each poised to deliver substantial returns to investors. These stocks also have significant revenue and earnings increases on the horizon that could make them particularly attractive to both short- and long-term investors.
Nu Holdings (NU)
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Nu Holdings (NYSE:NU), a Brazilian digital banking pioneer, has shown impressive consistent growth in revenue and net profit year after year.
In the last four quarters, the company has had twice consensus has passed earnings per share (EPS) estimates.
Nu Holdings posted revenue of $2.74 billion for the quarter ended March 2024, topping consensus estimates by 5.92%. That compares with revenue of $1.62 billion a year ago. The company has topped consensus revenue estimates four times over the last four quarters.
Year to date, Nu shares have gained approximately 36.6%, outperforming the stock S&P 500 gain of 9.5%.
Analysts are also very optimistic about NU’s potential over the next four years EPS and revenues rising. Nu Holdings is expected to generate revenue of $12.12 billion, a substantial increase of 50.93% from the prior year’s revenue of $8.03 billion.
In 2025, the company’s revenue is expected to continue its growth trajectory, reaching $15.03 billion, an increase of 23.99% from the 2024 forecast. The company’s EPS growth is particularly impressive, with a projected increase of more than 100% in 2024 and a further 46% in 2025.
Shift4 Payments (FOUR)
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Shift4 Payments (NYSE:FOUR) provides comprehensive payment processing solutions. It has strong buy ratings from analysts with significant upside potential forecasts.
The company recorded a turnover of $263.7 million for the quarter ended in March 2024, missing the consensus estimate of 1.81%. This represents a 31.9% increase from year-ago revenues of $200 million. Shift4 Payments has been unable to beat consensus revenue estimates over the last four quarters. It also reported quarterly profit of 54 cents per share, missing the consensus estimate of 61 cents per share.
I think FOUR is undervalued despite these near-term headwinds. Insider Monkey notes that the payment the company’s stock price fell after management determined that offers to acquire the company did not adequately value the business. This was despite Shift4 Payments openly considering a sale. It is down 5.89% year to date.
However, analysts predict that FOUR will recover strongly. Its value is expected to increase by 20.64% in the next 12 months.
MercadoLibre (MELI)
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MercadoLibre (NASDAQ:APPLES) has seen impressive growth in payment volumes and gross merchandise volume. Analysts expect significant earnings growth.
In 2024, MELI is it should generate revenue of $19.53 billion, which represents a substantial increase of 34.93% over the prior year’s revenue of $14.47 billion. MELI’s EPS is expected to reach $34.96 in 2024, a notable increase of 79.67% from 2023’s EPS of $19.46.
Meanwhile, PYMTS reported that MELI is in the process of apply for a banking license in Mexico. It could take 12 to 24 months. A banking license would allow MercadoLibre to receive payroll deposits, remove a limit on amounts withheld, and approve and issue credit cards more quickly.
Developing countries like Mexico, the broader Latin America region, and Southeast Asia are prime locations where fintech companies like MELI can quickly grow their subscriber base. Thanks in part to the large unbanked population, fears of corruption, and the middle classes’ growing need for access to credit, MercadoLibre is a strong fintech stock to buy.
As of the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, without prejudice to the InvestorPlace.com Publishing Guidelines.
Matthew began writing about financial markets during the cryptocurrency boom of 2017 and has also been a team member at several fintech startups. He then began writing about Australian and US stocks for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and New Scientist magazine, among others.