10 Best Fintech Stocks to Buy for 2024

Fintech stocks are poised for breakout growth once the dust settles on the 2022 stock market crash. Many of the companies listed below have grown their user base or plan to launch new, exciting products. Here’s everything you need to know about these exciting sectors all in one place.

What are Fintech Stocks?

Fintech stocks are companies that generate revenue through financial services related to digital payments, crypto, loans, and online banking.

Why are Fintech Stocks Falling?

Fintech stocks are crashing in price due to several factors that affect the entire sector. Here’s a list of those reasons:

  1. The Federal Reserve raised interest rates in March 2022 to curb inflation. This makes it more expensive to borrow money for consumers & businesses, which usually causes a slowdown in spending. When consumers spend less money, fintech companies are directly affected.
  2. Many fintech stocks were trading at crazy high P/E ratios but the November 2021 stock market bubble has burst. Now, these stocks are falling down to more realistic valuations.

Why Invest in Fintech Stocks

Fintech stocks generate revenue much easier than traditional brick-and-mortar businesses due to the economies of scale gained through technology. It’s likely that you use 1 or several of the companies mentioned below if you have access to high-speed internet.

Top Fintech Stocks by Market Cap

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1. Paypal (PYPL) – Best Large Cap Fintech Stock Under $100

Paypal is my top overall favorite fintech stock due to its massive size and importance in the overall digital economy. The company has 426 million active accounts and remains the most popular way to send and receive money online.

PYPL Key Metrics

  • 2021 Revenue: $25.4 billion (Up 17%)
  • 2021 Net Income: $4.17 billion
  • 2021 Total Payment Volume (TPV): $1.25 trililion
  • Total Active Accounts: 425 million
  • P/E Ratio: 24

PYPL has a wide moat and tons of brand recognition despite dealing with several internal issues related to cybersecurity and account safety.

PYPL stock trades at a fair valuation of under $90 but Paypal shares could dip lower in the short run.

2. Block Inc – Best Fintech Stock Related to Bitcoin & Crypto Mining

Block is 2nd most popular payment app in America thanks to Square & Cashapp but the company will also start mining Bitcoin with the help of Tesla’s power energy grid.

SQ Key Metrics

Former Twitter CEO Jack Dorsey stepped down from his dual CEO role in 2021 to fully focus on Block Inc, which is a good sign for shareholders moving forward. However, the problem is that SQ stock is grossly overvalued with a bloated P/E ratio of 300!

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Overvalued fintech stocks will continue selling off as institutional and retail investors flock towards the safety of bond yields, dividend stocks, or just plain cash while remaining on the sidelines.

I’m intrigued by Dorsey’s plans to mine Bitcoin, which could pay dividends after the next Bitcoin halving.

3. Coinbase – Best Fintech Stock Under $200

Coinbase is my preferred cryptocurrency exchange with over 89 million verified users. The company earns money through crypto commission fees but also launched an NFT marketplace to help diversify its revenue base.

Cryptocurrency markets move in bullish and bearish cycles based on the Bitcoin halving cycle because Bitcoin is the most dominant crypto coin and controls the majority of the price movements.

Coinbase earned $7.84 billion in 2021 revenue along with $3.62 billion in net income during the same period. I’m very bullish on Coinbase long term even though there may be some short-term volatility right now.

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Global crypto adoption is growing faster than the internet did and I expect Coinbase to remain the North American cryptocurrency market leader through this period.

Global Crypto Adoption Growth Chart

Coinbase is my favorite fintech crypto company by far and be sure to check out the top cryptocurrency stocks if you want to get in early on the blockchain & crypto market boom.

4. Upstart – Best AI Lending Fintech Stock

Upstart had a crazy run during 2021 when UPST shares soared as high as $400. The company experienced a loan volume downturn due to higher interest rates and slashed forward guidance for the rest of 2022.

That doesn’t mean Upstart stock isn’t a good buy at these current levels. I added Upstart to my list of millionaire maker stocks by 2030 because I believe AI lending is the future of the credit & loan industry.

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Banks will utilize AI technology to provide higher loan volume without increasing risk. That’s good news for borrowers who need loans to fund small businesses, purchase homes, buy cars, or pay for higher education.

Where Will Upstart Be in 5 Years?

By 2027, Upstart should experience a surge in loan volume and increase its bank partners to new highs. The company is extremely dependent on lower interest rates to grow its revenue and I expect the Fed to curb interest rate hikes in 2023 once inflation is under control.

More bank partners + higher loan volume = bigger profits for Upstart. More than 2/3 of loans on the Upstart platforms are approved automatically and the process is fully automated.

That means lower interest rates will send UPST stock soaring to new highs but it could be a bit tough in the short run for Upstart shareholders.

Upstart has a 3-year annual revenue growth rate of 89% and continues to increase its banking partners and total customers served.

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If Upstart’s revenue grows around 50% over the next 5 years then the company could hit $3.7 billion in annual revenue by 2027. Upstart may hit a total market cap of $60 billion in the same time frame.

That’s about 30x from the current stock price or $750 per share of UPST.

AI Lending Is the Future

AI technology is coming soon than we think and companies like Upstart are early in the artificial intelligence race.

Image a world where credit scores become obsolete and borrowers have a fair shot at receiving a loan regardless of their race, color, or background.

Banks will be forced to partner with Upstart if they want to maintain strong loan volumes. As Upstart grows in size, the company could focus more on growing auto & student loan volumes to drive more revenue & earnings.

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Should You Buy Upstart Stock?

Upstart is a high risk, high reward stock that got crushed once the Fed lowered interest rates. UPST shares trade at a Price to Sales ratio of 2 and look extremely undervalued now.

Warren Buffet said “Be Greedy when Others are Fearful” and I believe now is the time to take a serious look at UPST while the stock is down nearly 90%.

5. Sofi – Best Fintech Stock Under $10

6. Visa – Best Fintech Dividend Stock

7. Mastercard

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Best Fintech Stocks By Price Range

Fintech Stocks Under $50

How to Buy Fintech Stocks

Conclusion

Full Disclosure: I own shares of COIN

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