Despite recent market fluctuations, fintech stocks remain promising investments with the potential to deliver solid gains for investors. These companies are revolutionizing how we transact and think about money, including the rise of cryptocurrencies like Bitcoin (BTC-USD).
To take advantage of these fundamental shifts, I’ve researched three fintech stocks that offer an attractive tradeoff between risk and reward. Often overlooked in the financial media, these hidden opportunities have received strong buy ratings from analysts, signaling significant growth potential.
Falling interest rates predicted throughout 2024 and 2025 will benefit fintech companies by stimulating economic growth and increasing market liquidity. This environment is favorable for fintech stocks, especially those with innovative solutions and robust business models.
Here are three strong buy fintech stocks for June 2024, each poised to deliver substantial returns for investors. These names also have significant revenue and earnings hikes on the horizon that may make them particularly attractive for both short- and long-term investors.
Nu Holdings (NU)
Nu Holdings (NYSE:NU), a Brazilian digital banking pioneer, has shown impressive consistent revenue and net income growth year over year.
Over the last four quarters, the company has twice surpassed consensus earnings per share (EPS) estimates.
Nu Holdings posted revenue of $2.74 billion for the quarter ending March 2024, surpassing the consensus estimate by 5.92%. This compares to year-ago revenues of $1.62 billion. The company has topped consensus revenue estimates four times over the last four quarters.
Nu shares have gained about 36.6% year-to-date, outperforming the S&P 500’s gain of 9.5%.
Analysts are also very bullish on NU’s potential over the next four years for EPS and revenue increases. Nu Holdings is projected to generate revenue of $12.12 billion, a substantial increase of 50.93% compared to the previous year’s revenue of $8.03 billion.
In 2025, the company’s revenue is expected to continue its growth trajectory, reaching $15.03 billion, a 23.99% increase from the 2024 forecast. The company’s EPS growth is particularly impressive, with a projected increase of over 100% in 2024 and a further 46% in 2025.
Shift4 Payments (FOUR)
Shift4 Payments (NYSE:FOUR) provides comprehensive payment processing solutions. It has strong buy ratings from analysts with significant upside potential forecast.
The company posted revenues of $263.7 million for the quarter ended March 2024, missing the consensus estimate by 1.81%. This represents a 31.9% increase compared to year-ago revenues of $200 million. Shift4 Payments has not been able to beat consensus revenue estimates over the last four quarters. It also reported quarterly earnings of 54 cents per share, missing the consensus estimate of 61 cents per share.
I think that FOUR is undervalued even despite these short-term headwinds. Insider Monkey notes that the payment company’s stock price declined after management determined offers to acquire the company did not appropriately value the business. That was despite Shift4 Payments openly considering a sale. It’s down 5.89% year-to-date.
However, analysts predict that FOUR will bounce back strongly. There is an anticipated 20.64% surge in its value over the next 12 months.
MercadoLibre (MELI)
MercadoLibre (NASDAQ:MELI) has shown impressive growth in its payment volumes and gross merchandise volume. Analysts expect significant earnings growth.
In 2024, MELI is expected to generate revenue of $19.53 billion, representing a substantial increase of 34.93% compared to the previous year’s revenue of $14.47 billion. MELI’s EPS is projected to reach $34.96 in 2024, a remarkable 79.67% increase from the 2023 EPS of $19.46.
Meanwhile, PYMTS reported that MELI is in the process of applying for a banking license in Mexico. This could take 12 to 24 months. A banking license would allow MercadoLibre to receive payroll deposits, remove a cap on the amounts held and more quickly approve and issue credit cards.
Developing countries like Mexico, the broader Latin America region and Southeast Asia are prime locations for fintech firms like MELI to rapidly grow their subscriber base. Thanks in part to large unbanked populations, fears of corruption, and rising middle classes needing credit access, MercadoLibre is a strong buy fintech stock.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
