Three emerging tech stocks have exceptional growth potential and are expected to yield substantial profits by 2027. These businesses have proven to be strong industry growers, utilizing creative approaches to seize new market possibilities.
The first option in emerging tech stocks is a financial technology company based in Brazil, has experienced remarkable development in the banking and payments industries. The company’s active payment clientele expanded quickly, and its total payment volume (TPV) also increased, demonstrating the success of its client acquisition and retention campaigns.
The second one is a digital banking platform that has grown exponentially, surpassing 100 million customers and becoming the first digital bank outside of Asia. This highlights how quickly the business is growing and entering new markets. One of the top logistics companies in China, the third one has also shown solid growth, with a significant year-over-year (YOY) rise in package volume. The company’s ability to combine size and profitability is reflected in the significant increase in adjusted net income achieved due to its focus on profitable expansion and efficient cost management.
StoneCo (STNE)
In Q1 2024, StoneCo’s (NASDAQ:STNE) active payments clientele increased by 33% YOY to about 3.7 million. Although the client acquisition rate decreased compared to prior quarters as the company caught up to growth levels in the micro segment, this still represented a sequential net addition of 205K clients. Additionally, the TPV of micro-, small- and medium-sized businesses (MSMBs), which includes PIX P2M, grew by 24% YOY. The robust increases in intake rates and TPV indicate StoneCo’s effective strategy for growing its clientele and boosting revenue per transaction.
To reach almost 2.4 million active clients, the banking client base virtually quadrupled YOY. Super Conta Ton’s early 2023 release and the ongoing activation of banking services for Stone clientele through bundled offerings were the main drivers of this expansion. In Q1 2024, client deposits increased by 53% YOY to reach R$6 billion. Higher interaction with banking products drove this rise, demonstrating the potency of StoneCo’s integrated financial services capabilities. Hence, the monthly average revenue per active client, or ARPAC, rose to R$29.3.
This reflects StoneCo’s edge in monetizing its expanding customer base and boosting customer interaction with its banking products, making it a top option among emerging tech stocks.
Nu (NU)
By the end of Q1 2024, Nu’s (NYSE:NU) client base had grown to over 99 million, a 67% rise from just 59 million two years earlier. Nu, which operates in just three Latin American nations, recently announced that it has surpassed the milestone of 100 million clients. This is making the company the first digital banking platform outside of Asia to do so. By the end of Q1, there had been 91.8 million users in Brazil, where net customer additions averaged 1.3 million each month.
Additionally, Nu added about 1.5 million new clients in Mexico in Q1, bringing the total to 6.6 million clients—a notable increase year over year. This quick client acquisition in Mexico demonstrates how well Nu’s initiatives to boost positive yields and strengthen its market position work. The company’s overall customer expansion plan was strengthened by the substantial positive increase in its client base in Colombia.
Finally, in Q1, the customer base’s monthly activity rate climbed to 83.2% from 82.1% the previous year. Therefore, this is the metric’s ninth year of growth, demonstrating the business’s adeptness at attracting and keeping clients.
ZTO Express (ZTO)
ZTO Express (NYSE:ZTO) showcased robust growth in parcel volume during Q1 2024, surpassing 7.2 billion packages with a 13.9% YOY rise. This growth rate, which outpaced the industry’s overall growth rate of 25.2%, is a testament to ZTO Express’ increasing market share and operational effectiveness. Despite the challenges posed by a surge in inexpensive online packages, the company remained focused on profitable expansion. This was evident in its ability to increase adjusted net income by 15.8% to $2.2 billion, demonstrating its strategic management and operational effectiveness.
This focus on profitable expansion ensures long-term performance. Further, ZTO Express exhibited proficient cost control tactics, culminating in enhanced profitability. The firm achieved a drop in unit costs for its core express delivery activities, even though the total cost of sales increased by 7.7%. Hence, unit sorting expenses dropped by 5.4%, while line-haul transportation costs per package dropped by 7%.
Overall, these savings contributed to increased labor and automation productivity, standardized sortation processes, better resource usage and route planning.
On the date of publication, Yiannis Zourmpanos 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.
