In 2020 and 2021, the markets were buzzing with talk about the disruption threat fintechs posed to traditional financial institutions like banks. But, as soon as the Federal Reserve (Fed) began rate hikes, reality set in. Consequently, markets have thrown out the baby with the bathwater and there are several fintech stock bargains to buy.

Over the past decade, fintech companies have brought innovations to consumer finance. For instance, peer-to-peer applications like Block’s (NASDAQ:SQ) CashApp are leading the charge with convenient features like instant payments. As a result, consumers are adopting these technologies at a rapid pace.

However, over the last year, the sector has had some challenges. Fintechs have been widely associated with cryptocurrencies and some support their usage. In 2022 this link heightened uncertainty primarily due to the various fraudulent schemes that emerged. As crypto exchanges such as FTX collapsed, fintech stocks suffered in tandem.

At the same time, the Fed was raising rates leading to the banking turmoil in March. Also, since most buy now, pay later firms focus on near prime and subprime cohorts, their stocks sold off. Markets were selling, anticipating increased funding costs and credit deterioration.

In certain names, declines that started in 2022 have continued leading to discounted fintech stocks. However, given the positive economic surprises since May, these three fintech stock bargains are due for a catch-up trade.

Jack Henry & Associates (JKHY)

Jack Henry & Associates (NASDAQ:JKHY) is the second largest provider of banking software in the U.S. Its on-premises and cloud-based data processing system enables 950 banks and 720 credit unions to process transactions and more.

The Missouri-based financial technology company has underperformed the market and is down -4.8% year-to-date. Its exposure to banks and credit unions has been a headwind this year. However, now that the banking system has stabilized, it might be time to revisit one of the fintech stock bargains.

Results have been resilient. In its third quarter of fiscal year 2023, the company delivered 8% non-GAAP revenue growth despite the disruptions in the banking sector. For the full FY2023, management issued guidance for $2.021 billion to $2.028 billion, an increase representing 4% growth.

Looking ahead, management outlined the sizable market opportunity during its Investor Day in May. As banks increase investments in technology, Jack Henry will reap the benefits. They believe its next-generation banking platform will deliver the banking capabilities modern financial institutions need.

Additionally, as a value fintech stock investment, Jack Henry will reward patient investors. It is a disciplined capital allocator with a 20.1% return on invested capital and 34 fiscal years of consecutive dividend hikes.

TipRanks analysts see some upside in the stock, with an average price target of $176. BTIG analyst Lance Jessurun initiated coverage in June with a “buy” rating. He noted the stock’s bargain valuation, stating, “we believe JKHY should outperform in a strained environment, especially with shares trading at a discount to historical averages.”

Marqeta (MQ)

Since its IPO in June 2021, Marqeta (NASDAQ:MQ) stock has been in a downward spiral. In contrast, fundamentals have been solid, with the company delivering sequential growth each quarter since its market debut. Due to this divergence, it’s one of the best fintech stock bargains.

Marqeta provides a modern card-issuing platform to companies. Its APIs offer a cloud-based payment infrastructure that enables customers to issue customized payment cards. Customers can build unique payment cards, manage card programs and authorize and settle transactions through the platform.

Part of the reason why MQ has stagnated is because of its revenue concentration. Due to the nature of its platform, Marqeta relies on a few partners. As a result, it has ended up with a concentrated customer mix. For instance, in FY2022, it generated over 71% of revenues from Block.

As Marqeta continues to support innovation in the payment ecosystem, its revenues are growing rapidly. In FY2022, revenues grew 45%, highlighting the strength of its card issuing and transaction processing platform. It’s gaining customers as businesses migrate from the inflexible legacy payment ecosystem.

Marqeta remains one of the fintech stock bargains despite the impressive first quarter FY2023 results. Net revenues grew 37% YOY to $217 million. The company also highlighted its operating efficiency goals. “In the first quarter of 2023, we started to see our strategic focus on embedded finance and the implementation of new operating efficiencies pay off, laying a strong foundation for Marqeta’s future.” said Simon Khalaf the CEO.

Marqeta’s growth trajectory makes it one of the fintech stock bargains to buy. Invest alongside management who think the stock is undervalued and authorized a $200 million buyback last quarter.

DLocal (DLO)

DLocal (NASDAQ:DLO) has been one of the fastest-growing fintech stock bargains over the past two years. In 2021 and 2022, revenues grew 134% and 72%, respectively. The company mainly operates in emerging markets like Latin America, Asia and Africa.

Despite the growth, the stock has been a significant laggard this year, thanks to a Muddy Waters Research short report released in November 2022. Before the release, the stock was trading above $20 and hasn’t recovered from the losses.

After the short report, Bank of America came out in defense of the stock with a “buy” rating. Particularly, analyst Jason Kupferberg rebuffed the overstated take rate allegations. “Given the sophistication of DLO’s enterprise customers (such as Amazon (NASDAQ:AMZN) and Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google, we do not believe it is realistic that DLO is charging a huge premium vs. other providers.”

While the short report has been an overhang on the stock, the fundamental performance is strong. On May 18, the firm reported stellar Q1 FY2023 results. Revenues were $137.3 million, representing 57% YOY growth. Adjusted EBITDA was up 38% YOY to $45.5 million.

Management expects this earnings momentum to continue. CEO Sebastian Kanovich stated, “We are very excited about the massive opportunity ahead of us and we remain focused on executing our long-term strategy.”

Looking at the bigger picture, the stock is a bargain at a forward P/E of 20. More growth lies ahead as its technology platform redefines the online payment experience for emerging market merchants.

On the date of publication, Charles Munyi 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.