Fintech
Banking’s Worst Nightmare: 3 Fintech Stocks That Aim to Change the Game
Inherently, the financial technology (or fintech) space can help change the paradigm of the monetary ecosystem due to the underlying convenience. Nowadays, practically everyone has a smartphone. It is basically all you need to avail various essential services. Major institutions are so large that they may not have the flexibility to adapt quickly to changing conditions. So, this is a reason to consider disruptive fintech stocks: The associated offers are convenient.
Another factor, perhaps the most important, is accessibility. What makes disruptive fintech stocks so powerful is that they open doors to millions (if not billions) of people around the world. Again, not everyone has access to a physical bank. But most people these days have a smart device. So what fintech players are doing is removing barriers to credit and other financial services and bringing solutions to users’ fingertips.
This will drive major institutions crazy. Oh well. Below are some interesting and disruptive fintech stocks to consider.
PayPal (PYPL)
One of the most popular disruptive fintech stocks available, Payment via PayPal (NASDAQ:PYPL) is the vanguard of the industry. It has been around for a while and the management is well aware of the changing trends in the payments ecosystem. That is why I do not think it is prudent to worry about PYPL volatility. Yes, it is down significantly from its 2021 high point. If anything, we may have a relative discount here.
A key aspect to consider is that PayPal offers its users an intuitive business management software. Administrative tasks such as invoicing, cash flow analysis, and other elements are handled effortlessly. In my opinion, these features make PYPL stock an ideal investment for the burgeoning gig economy. With the changing nature of the workplace, PayPal finds itself organically as a relevant platform.
During the trailing 12 months (TTM), PayPal reported net income of $4.34 billion or earnings of $3.97 per share. Revenue in the cycle reached $30.43 billion. For fiscal 2024, analysts admit to seeing an erosion in earnings per share to $4.20. However, revenue could jump 15.2% to $32.03 billion.
Sea (SE)
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Headquartered in Singapore, Sea (London share:SELF) ranks among some of the elite disruptive fintech stocks. This is due to a combination of its relevance and geographic positioning. With its subsidiaries, Sea provides digital entertainment, e-commerce, and digital financial services. All three business units are likely to enjoy a northerly trajectory, making SE stock an attractive opportunity.
Furthermore, Sea is not just another fintech player. Rather, it is positioned to serve the burgeoning internet economy of Southeast Asia. According to the World Economic Forum, the region could become a $1 trillion digital ecosystem. In fact, before the COVID-19 crisis, many experts had predicted that this market would reach this fundamental valuation.
Sure, Sea has produced wildly inconsistent earnings performance. However, the important point is that it is profitable, generating net income of $38.99 million in the TTM period. Additionally, revenues reached $13.76 billion in the cycle.
For fiscal 2024, experts expect EPS to expand by 80% to 70 cents. Additionally, sales could rise to $15.41 billion, an increase of 17.9%. Additionally, fiscal 2025 could produce EPS of $1.62 on sales of $17.49 billion.
Robin Hood (HOOD)
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At first sight, Robin Hood (NASDAQ:HOOD) may not seem like the ideal move among disruptive fintech stocks. Sure, shares of the financial services company, which provides out-of-the-box access to an app-based stock and cryptocurrency trading platform, have skyrocketed this year. However, since its public market debut, HOOD has seen a notable decline of more than 40%.
However, Robinhood is easily disruptive, especially for the big banks and their investment and wealth management arms. You see, with the big names, they have certain requirements, like minimum asset holdings and whatnot. If you show up with any money to your name, you will be laughed at and thrown out of the building. However, Robinhood opens up access to pretty much everyone.
It’s super attractive. It’s also super disruptive.
Notably, during the TTM period, Robinhood reported net income of $127 million or 14 cents per share. Revenue reached $2.04 billion. For fiscal 2024, analysts are forecasting a gigantic EPS expansion to 53 cents (from a loss of 61 cents last year). Additionally, revenue could jump 30% to $2.42 billion. Yes, it is one of the disruptive fintech stocks.
As of the date of publication, Josh Enomoto did not have (either directly or indirectly) any position in the securities mentioned in this article. The views expressed in this article are those of the author, subject to InvestorPlace.com policies Publishing Guidelines.
As of the date of publication, the responsible editor did not hold (either directly or indirectly) any position in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major deals with Fortune Global 500 companies. Over the past several years, he has provided unique and critical insights into the investment markets, as well as a variety of other industries, including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.