Fintech stocks continue to lead the way with groundbreaking innovations in payments and customer services.
Powered by the shift to cloud computing, fintech businesses have grown exponentially over the years, offering exciting opportunities for investors. Signs are pointing toward an imminent rate cut and a market rally. So, now may be an opportune time to strategically load up on hidden gem fintech stocks for extraordinary gains.
Furthermore, the fintech stocks sector had a valuation of $257.26 billion in 2022. That represents a disruptive force, reshaping traditional banking and monetary transactions. Projections are exhilarating, forecasting a surge to $882.3 billion by 2030. This ambitious trajectory, boasting a robust compound annual growth rate (CAGR) of 17% from 2023 to 2030, sets the stage for an electrifying future.
Amidst this thrilling narrative, let’s explore three under-the-radar fintech stocks that offer solid upside potential ahead.
Ayden (ADYEY)
Amidst the post-pandemic upheaval, Adyen (OTCMKTS:ADYEY) has steered a resilient course. It has charted its way through soaring inflation and interest rates. Following a setback late last summer triggered by a deceleration in sales growth, Adyen has impressively doubled from its lows, with a notable 23.76% surge this year.
Moreover, the second-half figures in 2023 reveal a robust performance. This underscores Adyen’s prowess in the digital payment processing sector. Processed volume soared to €544.1 billion, a stellar 29% year-over-year (YOY) increase, with point-of-sale volumes reaching €92.9 billion, a noteworthy 37% YOY surge. This operational strength translated into an impressive uptick of 23% YOY in net revenue, totaling €887.0 million. Meanwhile, EBITDA reflected a solid 14% annual growth, reaching €423.0 million, with an EBITDA margin settling at an admirable 48%.
Hence, ADYEY stock stands as a beacon of market confidence in its robust growth potential, making it an enticing investment choice.
Shift4 Payments (FOUR)
Shift4 Payments (NYSE:FOUR) presents an intriguing investment case despite a trailing P/E ratio exceeding 45 times.
The real allure lies in the anticipated 107% earnings growth this year. This may potentially reduce the company’s forward multiple to an attractive 23 times. This possibility for substantial growth positions the company as an enticing prospect for savvy investors
Amid the challenges of the 2021 post-pandemic landscape, FOUR emerged as a standout among fintechs. Shift4Payments is propelled by its strategic exposure to e-commerce and the hospitality industries, which thrived during pandemic-induced lockdowns. Despite economic uncertainties later in the year, the company exhibited resilience and maintained its growth trajectory.
Adding to the optimism, recent takeover speculation has sparked intrigue around Shift4 Payments. While Global Payments (NYSE:GPN) denied acquisition talks, rumors on December 14th suggested otherwise. Whether or not a takeover materializes, the speculation underscores FOUR’s potential value to a strategic acquirer, further contributing to the company’s lucrative sentiment.
Nu Holdings (NU)
Nu Holdings (NYSE:NU) has solidified its position as a standout player in the fintech sector, with a 107% gain over the past year. In the third-quarter of 2023, Nu Holdings expanded its customer base by a robust 27% YOY, reaching a substantial 89.1 million customers. Transitioning to financial performance, the monthly ARPAC hitting $10 and a 53% YOY revenue upswing to $2.1 billion underline Nu’s robust performance.
Moreover, Nu distinguishes itself through its exceptional efficiency, as evidenced by its low-cost structure. It boasts a cost-per-active customer at an all-time low of 90 cents and an efficiency ratio of 35%. This positions NU stock as one of the most efficient companies in Latin America.
Additionally, Nu Holdings impresses with a $356 million adjusted net income and a significant 25% annualized return on equity. Therefore, NU is a compelling choice for investors seeking a potent blend of financial strength and growth.
On the date of publication, Muslim 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.
