The fintech sector has significantly benefited from the advances in technology and the past few years have seen a solid growth of this sector. The pandemic pushed people towards digitisation and they adopted cards and started making online payments for daily usage. This transition has continued and it led to a need for innovation. This has led to the rise of fintech stocks to buy.
Many banks and payment companies have come to the forefront today and are enjoying the rise and adoption of fintech. This sector has a long way to go and it is something that will never grow old. Smart investors know that now is the time to invest in fintech stocks to build a strong portfolio and grow your profits.
Here are the three fintech stocks to buy as they are set to soar higher.
SoFi Technologies (SoFi)
SoFi Technologies (NASDAQ:SOFI) entered the market in June 2021 and didn’t see its best days for a very long time. However, the stock is making a recovery and is up 66% year to date. It is currently exchanging hands for $7.51 and any level below $10 is worth buying. The biggest reason to invest in the stock is its diversified business portfolio which allows the company to cater to all customers and offer a one-stop financial solution.
It saw a 37% year-over-year rise in revenue in the recent quarter which came in at $498 million. It also saw a 44% rise in the customer base to hit 6.2 million. Despite the market turmoil, this is an impressive number. The management raised guidance for the full year and now expects the adjusted revenue to be $2 billion.
Now is an ideal time to invest in the stock with student loan payments set to resume soon. It could give a much-needed boost to the business. With several banks and financial institutions facing trouble and turmoil, SoFi feels like a safe place for investors. The revenue and customer growth prove that the company is moving in the right direction and it has also seen a lower net loss this quarter. It reported a loss of $48 million which is much lower than the $96 million reported earlier.
There is competition in the industry but SoFi is enjoying an early-mover advantage. Its digital-only model can help keep the costs down and achieve higher profits. The company could soon turn profitable and this is when the stock will explode higher. Buying the stock below $10 and holding it for the long term will ensure significant gains. SoFi is one of the best fintech stocks to buy right now.
A leading fintech stock, PayPal (NASDAQ:PYPL) has had the best days during the pandemic. It saw a surge in the active accounts and total payment revenue which led to strong financials. But as the impact of the pandemic waned, we saw the business slow down. PYPL stock is trading at $58 today, just higher than the 52-week low of $57.29. The stock is down 21% year to date and this drop is a good chance to buy.
The only reason for the business slowdown is the rising interest rates and inflationary pressure which led to a change in consumer spending. It has impacted several businesses like PayPal but I believe this is temporary and as the economy improves, we could see the company pick pace. In the recent quarter, the company saw the total payment value increase to $377 billion, an 11% rise despite a drop in the number of users.
As long as the accounts continue to engage with PayPal, it will keep making money since the company charges a fee and generates revenue through it. Hence, whenever a transaction is made, the company will make money. It also saw a 7% rise in revenue in the recent quarter, proving that despite the market uncertainty, it does have some loyal customers out there.
PayPal is one of the earliest companies to enter the world of fintech and it is here to stay. The drop in users is temporary and I believe the company will report better numbers during the holiday season. Buy the stock in the dip.
Block (NYSE:SQ) has remained a hot stock since the time it went public. It is a favorite of businesses and has helped meet the needs for digital payments. Just like SoFi Technologies, the company isn’t profitable yet and the stock is trading at $45 today, down 29% year to date. The stock is very close to its 52-week low of $44 and you might not get such an opportunity to buy the stock. The dip makes it a good chance to buy.
It is a major fintech player and has several businesses which will continue to generate revenue. It has seen a 26% year-over-year rise in revenue to hit $5.5 billion and this was led by the Cash App. The Cash App is a major contributor to the company’s growth and revenue. It is a solid business that offers several financial services including credit card and bank accounts.
With the growth of the digital payments industry, we could see Block grow in the coming months. However, it may not see an immediate rise. You will have to remain patient and hold on to the stock to see significant gains. The market opportunity is massive and Block has what it takes to turn profitable. If you buy now, your money could grow.
On the date of publication, Vandita Jadeja 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.