Fintech growth stocks have been on an incredible run over the past few years. By harnessing the power of digital platforms, data analytics and artificial intelligence, these companies are carving out a path for cost-effective, convenient solutions for both individuals and businesses.
Traditional financial institutions are also jumping on the bandwagon, integrating high-tech tools to streamline operations while enhancing customer interactions effectively. This trend has captured the attention of venture capitalists, evidenced by the hefty $42 billion invested in the sector in 2020 alone.
Furthermore, propelled by a robust 20.3% compound annual growth rate, the global fintech market is set to soar to $698.4 billion by 2030. Perhaps one of the biggest catalysts for this projected growth is the Asia-Pacific’s sparse banking landscape, primed for a 27% growth bump. Herein lies the golden opportunity for fintech to become these regions’ economic backbone.
Consequently, these three fintech stocks have strong fundamentals and growth potential that could make them attractive investments right now.
SoFi Technologies (SOFI)
SoFi Technologies (NASDAQ:SOFI), a standout in the online personal-finance arena, has been turning heads with its all-encompassing financial services. A diversified business portfolio positions SoFi as the go-to financial hub for a broad spectrum of customers. Impressively, the company’s market capitalization skyrocketed from $4.1 billion in October 2022 to $7 billion in 2023, further solidifying its appeal.
In its latest quarter, SoFi’s revenue climbed a notable 37% year-over-year. Additionally, SoFi projects a 35.57% revenue increase, vastly surpassing the sector’s median of 5.44%. Alongside these gains, SoFi’s customer base grew by 44%, reaching a commendable 6.2 million.
In the face of stiff competition, SoFi leans into its first-mover status and digital-only strategy. This streamlined model not only curtails overheads but also sets the stage for heightened profitability.
Block (SQ)
Block (NYSE:SQ), a juggernaut in the fintech sector, commands attention with high-performing subsidiaries like Square, Cashapp, and Tidal. The company’s second-quarter 2023 financials were robust, with revenues reaching $5.53 billion. Its earnings-per-share grew an impressive 116% year-over-year, complemented by a promising 12.45% forward growth. Notably, management skillfully navigated operations, evidenced by the $113.32 billion cash influx, up by a staggering 198.8% year-over-year.
Pivoting to expansion strategies, Block’s partnership with the African Crypto Exchange Yellow Card sets a new stage. The collaboration, spanning 16 African countries, streamlines cross-border payments, fortifying Block’s presence in markets like Nigeria and Ghana. This strategic move not only broadens its global customer base but fortifies its fintech infrastructure. Moreover, with the digital payments sector burgeoning, Block is in a strong position for growth, though patience is crucial. Investors should brace for a gradual ascent, focusing on long-term gains.
ADYEN (ADYEY)
Originating from the picturesque Netherlands and now casting a vast shadow across the globe, Adyen (OTCMKTS:ADYEY) masterfully navigates the intricacies of the fintech sphere. Here’s a taste of their influence: every digital transaction you make at McDonald’s (NYSE:MCD) runs seamlessly through Adyen’s infrastructure, underscoring its attractiveness to blue-chips’ businesses.
Diving into Adyen’s fiscal performance, the first half of the year revealed a robust GAAP EPS of €9.07. Not stopping there, net revenues leaped by a noteworthy 21.5% year-over-year, hitting €739.1 million. Impressively, Adyen’s forward revenue growth rate of 22.58% trounces the sector median of 5.44%. Equally compelling, its long-term EPS growth forecast of 18.48% surpasses the sector median of 9%.
Moreover, Adyen’s vertical integration has carved out its unique niche, especially as Europe inches closer to a cashless society. For those eyeing future-ready fintechs, Adyen emerges as a promising contender.
On the date of publication, Muslim Farooque 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 the InvestorPlace.com Publishing Guidelines.
