The Next Robinhood? 3 Fintech Stocks That Investors Shouldn’t Ignore.
As Investor’s Business Daily reported, there are some overvalued, uninspiring companies in the fintech sector. Block (NYSE:SQ), SoFi (NASDAQ:SOFI) and Affirm (NASDAQ:AFRM) have seen some lackluster moves lately. However, other impressive names in the sector are growing rapidly. The top and bottom lines of a number of fintech firms in developing markets, for example, are increasing at tremendous rates. Additionally, a few up-and-coming payment processors have bright futures. So when it comes to buying fintech stocks, picking the right names is important. With all of that said, here are three fintech stocks that are well-positioned to outperform over the long term. All three of them can match, or surpass, Robinhood’s (NASDAQ:HOOD) past returns.
MercadoLibre (MELI)
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Brazil-based MercadoLibre (NASDAQ:MELI) is widely known as an e-commerce player. However, it also has a large, rapidly expanding payments processing business.
Indeed, in Q3 2023, the company’s total payment volume jumped 45% YOY to $47.25 million. Additionally, its total payments have climbed 43% YOY to $126 million in the first three quarters.
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On its Q3 earnings call, MercadoLibre reported that its payments business had grown in all operating regions. The firm also noted a drop in its its non-performing loan total, with a particularly large decline in its home market, Brazil.
Also noteworthy is that the company’s credit card business appears to be taking off, as it issued an impressive total of one million credit cards in Q3.
The shares have a justifiably elevated forward price-earnings ratio of 46. Analysts, on average, expect its earnings per share to more than double to $21.53 this year.
Shift4 Payments (FOUR)
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Shift4 Payments (NYSE:FOUR) provides card acceptance and processing solutions.
Compared to the same period a year earlier, the company’s Q3 sales jumped 23% to $675 million, its payment volumes soared 36% and its EBITDA, excluding certain items, jumped 46%.
Thanks to an acquisition of a major competitor, Shift4’s saw a significant increase in market share across major league sports, well-known marquee venues and theme parks. Given the extent to which millennials and Generation Z value experiences, this deal will be a large boost for Shift4 Payments.
Additionally, Global Payments (NYSE:GPN) was reportedly interested in buying Shift4. Such a deal would be a huge boost for Shift4, further cementing its place as one of the best fintech stocks to buy.
Adyen (ADYEY)
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Payment tech firm Adyen (OTCMKTS:ADYEY) was recently upgraded to “outperform” from “market perform” by investment bank TD Cowen.
The bank reported that it was no longer concerned about the firm’s growth and competition, thanks to Adyen’s Q4 financial results.
In the second half of 2023, the company’s top line soared 23% YOY, while its EBITDA rose 14% YOY. Adyen’s market share in North America is increasing as the region embraces alternative types of digital payments. That bodes well for Adyen’s outlook.
On the date of publication, Larry Ramer 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.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.
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