7 Undervalued Fintech Stocks to Buy Right Now

  • Fintech stocks are on the rise. This is due to the increasing popularity of fintech, a new type of financial technology that uses electronic platforms to provide financial services. Fintech companies are seeing high growth because of the interest from investors, who often look for companies with the potential for high returns and efficiency.
  • PayPal Holdings (PYPL) -- PayPal is a great investment because it is a stable company with a strong track record of growth. It is positioning itself to benefit from the continued growth of e-commerce and mobile commerce.
  • Visa (V) -- Visa is a leading provider of payment processing and card services, making up 52.8% of total branded cards in circulation. Visa also offers a suite of digital payment products, including Visa Checkout, Visa Direct, and Visa payWave.
  • Lemonade (LMND) -- Lemonade uses artificial intelligence to underwrite and price insurance policies, making the process more efficient.
  • Intuit (INTU) -- Intuit is a great investment for anyone looking to invest in a stable company. Intuit produces software that helps people manage their finances, including TurboTax, QuickBooks, and Mint.
  • Block (SQ) -- Block provides its services to businesses and individuals through its Block Cash app, which allows users to send and receive money, complete online purchases, and track spending. The company also has a unique relationship with crypto, which makes it an aggressive play for crypto investors.
  • Goldman Sachs (GS) --Goldman Sachs is one of the world's leading investment banks that invest in businesses, providing finance and access to capital. In recent years, Goldman Sachs has been at the forefront of digital innovation, developing new platforms and products that meet the changing needs of its clients.
  • SoFi (SOFI) -- SoFi has been known for its innovative products and services, such as student loan refinancing and mortgage loans. However, it is growing its product suite and no longer relying on just one revenue stream.
fintech stocks - 7 Undervalued Fintech Stocks to Buy Right Now

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Fintech stocks have been some of the best-performing stocks in recent years, as investors have bet on the industry’s continued growth. More specifically, mobile payments, peer-to-peer lending, online banking and investment management are just a few fintech products available.

Overall, fintech stocks have been rising recently as investors have expressed more interest in the space. There is also a ton of potential with fintech startups as they provide new solutions to traditional problems and allow people to save money while doing so.

Of course, trading them poses some risks. Overall, though, they make for better investments than traditional stocks.

With all of that in mind, these seven undervalued fintech stocks are both established and new names with varying risk profiles. However, all of them have something new to offer for investors and users alike.

Ticker Company Price
PYPL PayPal $85.86
V Visa $211.35
LMND Lemonade $19.84
INTU Intuit $448.59
SQ Block $74.68
GS Goldman Sachs $329.11
SOFI SoFi $6.30

Undervalued Fintech Stocks: PayPal (PYPL)

PayPal logo and front of headquarters. PYPL stock

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PayPal (NASDAQ:PYPL) is a payment processor that allows customers to send and receive money online. And with more than 429 million active accounts in 200+ markets, it’s no wonder that this service has become so popular.

Overall, the payment processor completed $323 billion worth of transactions during its last quarter. In other words, PayPal is growing at an incredible rate. And the company is predicted to continue in the future and live up to its high expectations.

Furthermore, PayPal is also investing heavily in new technologies, like artificial intelligence (or AI) and blockchain, which will allow it to continue to grow its business and meet the needs of more customers. And with the global economy increasingly moving online, PayPal is positioned to continue growing at an impressive rate.

Visa (V)

several Visa branded credit cards

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Visa (NYSE:V) is a world leader in financial technology. From credit and debit cards to digital payments, Visa has a wide range of products that make it easy for people to pay for goods and services. Visa also provides many services for businesses, including merchant processing and fraud prevention. And, in recent years, Visa has been working on expanding its reach into the world of fintech.

The company has invested in several startups and developed new products that use cutting-edge technologies like blockchain, machine learning, and AI. With this, Visa’s goal is to provide even more convenient and secure ways for people to pay for goods and services. Because as the world of fintech continues to grow, Visa will be at the forefront, providing innovative solutions that make it easy for people to pay.

Furthermore, Visa has a strong track record of financial stability and growth and offers a variety of perks and rewards for cardholders — making it a smart choice for consumers looking to get the most value for their money. With inflation on the rise, it’s no surprise that Goldman Sachs says Visa and Mastercard (NYSE:MA) can rally 30%, considering their solid operating models.

Undervalued Fintech Stocks: Lemonade (LMND)

Lemonade stock logo displayed on smartphone laying on top of computer keyboard.

Source: Stephanie L Sanchez / Shutterstock.com

Lemonade (NYSE:LMND) is a delicious summertime drink. However, did you know a company sharing the name of this refreshment can help finance your insurance premiums? More specifically, Lemonade is a peer-to-peer insurance company that allows customers to use their smartphones to purchase and manage their policies through the use of AI.

Through algorithms, it can analyze data, identify patterns and predict the probability of an event happening. In turn, Lemonade has been able to use this data and create a product that is effective and profitable for its clients. Now, insurance companies are looking at how they can use AI to make their products more effective — and Lemonade is at the cutting edge of this trend.

At its core, Lemonade uses data from its customers better than most traditional insurance companies. This information then sets them up for success and opens the door to a major advantage for the foreseeable future.

Furthermore, Lemonade has been able to avoid hiring as many agents and adjusters by using AI chatbots. This means employees can have time to focus on other aspects of their business and do less work. Specifically, Lemonade stands out from its competitors with one employee for more than 1,700 customers, while the competition usually has one employee for less than 150-450 clients.

The digital insurance company has seen a $419 million in-force premium and an increase of 66% over last year — all thanks to its innovative policies. The company has stated that it doesn’t want to pay out more than 75% in premiums. In Q1, the company recorded a gross loss ratio of 90%. This is a key area of improvement for the company; otherwise, it is doing quite well and will bounce back with the overall market.

Intuit (INTU)

An image of Intuit Turbotax books

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Intuit (NASDAQ:INTU) is a financial software company that develops and sells tax preparation, personal finance and accounting software. Intuit offers a range of products, from business accounting software to personal finance apps. This includes Intuit’s flagship product TurboTax, a do-it-yourself tax preparation program.

Collectively, Intuit has more than 14,200 employees and reported 25% revenue growth in fiscal 2021. Millions of people around the world use Intuit’s products.

Intuit also has strong financials, good growth history and a competitive position in the software industry. It’s no secret that Intuit has always delivered strong ROI, with increasing revenues and earnings per share (or EPS) in each of the last five fiscal years.

The software company has a strong competitive position, and the diverse revenue streams of this company are what make it so successful. It’s not just about taxes but also how it generates money through other channels like Quickbooks and TurboTax, with a 67% market share in the U.S. tax software industry. Intuit also benefits from a large and loyal customer base, with approximately 100 million customers using its products.

Therefore, with all of this in mind, Intuit is a great stock to invest in for long-term growth.

Undervalued Fintech Stocks: Block (SQ)

The logo for Block is shown on a phone screen with the company's old name and logo, Square, visible behind the phone.

Source: Sergei Elagin / Shutterstock.com

Block (NYSE:SQ) is a financial technology company that provides tools for blockchain and digital currencies founded by Jack Dorsey, a co-founder of Twitter (NYSE:TWTR). Block has been working to make blockchain more user-friendly and lower the mass adoption threshold. To fulfill this mission, it is operating an open source software that will enable quick and painless access to financial services through the power of blockchains.

Block provides its services to businesses and individuals through its Block Cash app, which allows users to send and receive money, make online purchases, and track their spending. Block also offers a business management platform called Block Connect, which helps businesses accept payments, manage customer data, and connect with other Block-enabled businesses.

Jack Dorsey’s resignation from Twitter has been met with enthusiasm by investors, as he is now pouring all of his energy into Block. However, Square’s CEO and former Twitter co-founder is a huge believer in the future of cryptocurrency and blockchain. This makes Block slightly riskier than the average fintech. But that means it holds the power to become a multi-bagger. Therefore, patience is a virtue with this one.

Goldman Sachs (GS)

The Goldman Sachs logo is displayed on a smartphone in front of a multi-color background.

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Goldman Sachs (NYSE:GS) is one of the world’s most prestigious investment banking companies., and in recent years, has been at the forefront of financial services innovation.

The company was an early adopter of the mobile banking movement and was one of the first banks to offer a full suite of online services. Goldman Sachs has also been a pioneer in blockchain technology, which promises to revolutionize how financial transactions are conducted. As a result of its innovative approach to digital disruption, Goldman Sachs is well-positioned to continue its role as a leading financial services provider in the years to come.

In addition, the company has a history of consistent growth and profitability, and it is currently one of the largest investment banks in the world. Specifically, Goldman Sachs has a strong presence in both the U.S and Europe, and it is one of the few banks that survived the financial crisis of 2008.

The multinational investment bank reported net revenues of $59.34 billion and earnings of $21.64 billion for the fiscal year 2021, which came in at an impressive clip, with total performance measuring up to expectations by every measure. Moreover, despite a tough operating environment, earnings for the second quarter of 2022 were $7.73 per share, handily beating the consensus estimate of $6.56 per share.

Overall, Goldman Sachs has been a great investment for many investors. The company offers stability and long-term growth potential, with an impressive track record of success that is expected to continue in the future.

Undervalued Fintech Stocks: SoFi (SOFI)

Person holding smartphone with website of US financial company Social Finance Inc (SoFi) on screen with logo Focus on center of phone display

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SoFi (NASDAQ:SOFI) is an online personal finance company that offers a range of financial products, including student loan refinancing, personal loans and mortgage loans. The company also has a range of banking products to offer, including high-yield savings cards and checking accounts.

SoFi has more than 3.9 million members, and this user base is growing briskly. It is growing rapidly and is expanding into new markets, such as investment management and insurance. SoFi has since expanded and now offers credit cards, equity lines of credit, and more. The goal is to continue to grow by expanding into new markets and offering new products.

As I touched on earlier, refinancing student loans is a big part of SoFi’s business. However, the recent pause on federally-backed loan payments has been beneficial for millions of Americans who are in debt. Unfortunately, as SoFi CEO Anthony Noto notes, “our student loan business got cut in more than half” after the student loan payment pause.

Nonetheless, SoFi has managed to grow despite these issues. It is because the online personal finance company has diversified its business model through acquisitions such as that of payment processing platform, Galileo, and cloud-based core banking system, Technisys. In addition, the approval of its bank charter opens up many other business opportunities — meaning the sky’s the limit for this one.

On the publication date, Faizan Farooque 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 InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.


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