Fintech
The 3 best Fintech stocks to buy in May 2024, according to analysts
Global Payments, Visa and Fiserv are the 3 best Fintech stocks to buy in May 2024, according to Wall Street analysts. We took advantage of the TipRanks Stock Screener Tool to discover fintech companies that analysts are bullish on. The financial technology or fintech sector encompasses a wide range of activities, including payment processing, digital banking, lending, financial software and financial services.
The fintech sector is set to witness greater momentum in 2024 with the expectation of interest rate cuts by the end of the year. More and more people are switching from traditional banking and lending services to technologically advanced financial solutions to meet their financial needs. Furthermore, with the advent of artificial intelligence (AI)-LED, the ease and efficiency of fintech platforms have improved dramatically. Additionally, consumers are becoming more familiar with digital currencies, providing greater possibilities for the growth of fintech platforms. With this context in mind, let’s take a deeper look at the three companies.
No. 1 Global Payments (NYSE:GPN)
Global Payments offers payment technology and software solutions to merchants, issuers and consumers. GPN’s services include card, electronic, check and digital payments in the United States and international markets. The company has more than 4 million payment customers in more than 100 countries, processing more than 66 billion transactions each year. GPN also pays regularly quarterly dividend of $0.25 per share, which reflects a yield of 0.9%. Furthermore, the company’s board of directors has authorized to $2 billion stock repurchase plan.
In Q1FY24, GPN Adjusted earnings per share (EPS) increased 8% year over year to $2.59 and also surpassed the analyst consensus of $2.57. Meanwhile, adjusted net revenue grew 7% year over year to $2.18 billion. Based on continued momentum, GPN expects 2024 adjusted net revenue growth of 6% to 7%. Additionally, adjusted EPS is expected to grow 11% to 12%.
Importantly, GPN trades at a forward P/E or price-to-earnings (non-GAAP) of 9.52x, lower than the industry average of 10.56x and also below its five-year average of 18.94x , indicating that the stock is currently undervalued and has further room to grow.
Is GPN a good stock to buy?
With 21 Buys and four Hold ratings, GPN stock has a Strong Buy consensus rating on TipRanks. THE Global Payments average price target of $154.25 implies an upside potential of 38.9% from current levels. Over the past year, GPN shares have gained 4.1%.
#2 Visa Inc. (NYSE:V)
The multinational payment card service provider Visa needs no introduction. The company does not issue credit cards or loans. Instead, it facilitates electronic fund transfers around the world, most commonly via Visa-branded credit cards, debit cards, and prepaid cards. Visa pays regularly cash dividend of $0.52 per sharewhich represents a yield of 0.7%.
In Q2FY24, Visa easily beat consensus estimates on both top and bottom lines. Compared to the prior-year quarter, payment volume grew 8%, cross-border volume increased 16%, and transactions processed increased 11%. In the three months ending March 31, Visa repurchased $2.7 billion worth of shares and has $23.6 billion remaining in its authorized repurchase program.
For Q3FY24, Visa expects low double-digit net revenue growth and EPS growth in the low double-digit range compared to the prior-year period. Visa trades at a forward P/E (non-GAAP) of 27.81x, above the industry average but below the five-year average of 31.72x, reflecting the potential for further growth.
Are Visa shares a buy or a sell?
V stock has a Strong Buy consensus rating on TipRanks based on 19 Buys versus four Hold ratings. THE Visa average price target of $313.80 implies an upside potential of 13.2% from current levels. V shares have gained 18.8% over the past year.
#3 Fiserv Inc. (NYSE:FI)
Fiserv is an American multinational corporation that provides account processing, digital banking, card issuer processing, network services, payments, e-commerce, and merchant acquiring and processing services. Fiserv has more than 6 million business locations worldwide and 10,000 financial institution customers. It processes more than 25,000 financial transactions per second at most.
In the first quarter of fiscal 2024, adjusted EPS increased 19% year-over-year to $1.88 and also beat consensus. Additionally, revenue grew 7% year-over-year to $4.88 billion, slightly beating estimates. Meanwhile, organic revenue increased 20% to $5.04 billion. The company is committed share buybacks worth $1.5 billion in the quarter.
For full-year fiscal 2024, Fiserv guided for organic revenue growth of 15% to 17%, while raising adjusted EPS guidance from $8.60 to $8.75.
Fiserv trades at a forward P/E (non-GAAP) of 17.60x, which is higher than the industry average but lower than its five-year average of 19.91x, signaling further growth potential.
What is the target price for Fiserv?
THE Fiserv average price target of $174.11 implies an upside potential of 13.6% from current levels. Additionally, FI stock has a Strong Buy consensus rating on TipRanks, supported by 18 Buys and five Hold ratings. Over the past year, FI shares have gained 28.4%.
Key points
The fintech sector could see massive growth as retail customer spending improves as macroeconomic pressures ease. Investors can consider the above mentioned three fintech stocks to diversify your portfolios and increase your returns.
