The 3 Most Undervalued Fintech Stocks to Buy in December


  • Fintech stocks are a sector to watch as the payments space evolves.
  • MercadoLibre (MELI): The Latin American payments and e-commerce firm remains undervalued.
  • Adyen (ADYEY): This Dutch firm has received a lot of attention but continues to have room to grow
  • Block (SQ): Block has rebounded nicely but has more room to rise based on early 2023 prices.
Fintech Stocks - The 3 Most Undervalued Fintech Stocks to Buy in December

Source: Sittipong Phokawattana/Shutterstock

Fintech stocks represent companies that have built and continue to build payment platforms. The financial space continues to evolve away from traditional fiat money and toward more digital innovation. The space is characterized by annual growth rates that should continue at approximately 14% through 2030.

The expectation of strong growth should be enough to continue to draw investors into the sector. Fintech stocks have experienced quite a bit of volatility in 2023. however, the market and the broader economy continue to stabilize. That will be a strong signal for investors, especially those who seek undervalued investments in fintech.

So, with this context in mind, here are the best and undervalued fintech stocks to buy for December.

MercadoLibre (MELI)

Illustration of phone with dollar sign and other graphics symbolizing fintech displayed on and around it, with a blue background. Fintech Stock Bargains

MercadoLibre (NASDAQ:MELI) has gotten much attention over the last several years while emerging as Latin America’s e-commerce and fintech champion. The stock continues to have room to grow after a strong 2023 that has seen its shares rise rapidly in value.

Mercado Libre’s largest markets are Argentina, Brazil, and Mexico. The company offers e-commerce and payments across 18 countries overall. Although MercadoLibre is best known as an e-commerce company, its payments platform, Mercado Pago, is very large. In the third quarter, the company’s payments volume increased by 121.3%, reaching $47.3 billion.

Mercado Pago also offers payment systems that are similar to products like Venmo, which our customers may be more familiar with. MercadoLibre’s overall growth is simply impressive. Revenues grew by more than 69% during the most recent period. As interest rates fall into 2024, it’s very reasonable to expect that MELI shares will only strengthen as a growth stock. Whether investors consider Mercado Libre for e-commerce or fintech, it provides much to like.

Adyen (ADYEY)

Graphic of side view of virtual financial charts with tech aesthetic, symbolizing fintech

Adyen (OTCMKTS:ADYEY), like MercadoLibre, is likely to be relatively unknown to U.S. investors because it isn’t a U.S.-based company. The Netherlands-based payments firm has a strong European presence And a footprint that extends into Africa, Latin America, and Asia.

The stock rebounded quickly after falling dramatically between August and early November. Currently, it is fully priced based on the consensus target of analysts. However, the high target price suggests that there is more than a 30% potential return from this point. 

Adyen continues to grow at a quick rate. In the third quarter, revenue increased by 22% on payments volumes that increased by 21%. I mentioned that the company has a strong presence in the European market. However, Adyen Is highly integrated with global American businesses as well. For example, every time a digital transaction is made at McDonald’s (NYSE:MCD), the company receives a fee.

Block (SQ)

A concept image of mobile payment with a smart phone for a cup of coffee.
Source: Shutterstock

Block (NYSE:SQ) has grown to encompass several other payment businesses, becoming one of the leading fintech stocks.

The company rebranded as Block to encompass a broader strategy that includes cryptocurrency, among other businesses. Block continues to be primarily fueled by its point-of-sale business known as Square and Cash App. Square accounted for $899 million of profit in the third quarter, while cash app accounted for $984 million. The company continues to have a strong presence, footprint, and growth that reached 21% during the period.

At the same time, investors continue to be wary of Block because it is so volatile. One of the reasons that it continues to be so volatile is that despite its large presence and strong profits, it continues to struggle and produces losses. In the third quarter, those losses reached $29 million. That said, SQ remains a fintech stock to buy in December, especially considering the expected rate cuts in 2024.

On the date of publication, Alex Sirois did not have (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 Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

Article printed from InvestorPlace Media,

©2024 InvestorPlace Media, LLC