Fintech
Wall Street Favorites: 3 Fintech Stocks With Strong Buy Ratings for May 2024
Fintech stocks to buy have recently been a favorite of growth investors. Why? The traditional financial system has long been overdue for an overhaul, and there are many fintech startups ready to make a change. Investors have already seen the fintech sector rapidly create a global network of payment services that has made sending and receiving funds easier than ever.
Of course, investing in fintech stocks hasn’t always been so profitable for investors. It turns out that converting traditional finance users to a new digital platform isn’t always the easiest process. However, given the rapid adoption of mobile payments and online banking, fintech can expect to see a growing addressable market. Here are three fintech stocks that have bright futures to consider.
Fintech stocks to buy: Robinhood (HOOD)
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Robin Hood (NASDAQ:HOOD) is a popular fintech platform that offers users savings, investments, and access to cryptocurrencies. The stock has been making headlines lately after the company turned a surprise profit in 2023. After some recent analyst updates, the average price target for HOOD is at $20.43, which represents an upside of about 20% from the current price.
The company’s latest quarter illustrates how well Robinhood is doing. Robinhood reported a record $11.2 billion in net deposits and a Up 42% year-over-year (YOY). in its Gold membership level. Pension assets reached $4.2 billion, an increase of nearly $4 billion from the previous quarter. Finally, Robinhood saw a 224% year-over-year increase in cryptocurrency trading, reaching $36 billion. All this and Robinhood only fully entered their second UK market earlier this year.
From a valuation perspective, Robinhood is trading at a fair price 7.0 times sales and it was increasing its income at a CAGR of 49% over the last five years. The company has successfully gained its loyal customer base of younger investors and is the overwhelming choice for Generation Z and millennials. If the company continues to expand its global market share, Robinhood should be a winner for decades to come.
Toasted bread (TOST)
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Toasted bread (NYSE:TOST) is a fintech company that operates specifically in the restaurant management sector. It provides point of sale technology based on the Android operating system. Analysts agree that Toast will likely have a bright future as almost all Yahoo! The financial analyst gave Toast a Buy or Strong Buy rating. The high price target of $32.00 represents an upside of nearly 25% from the current price.
Although TOST is known for its POS terminals, it has also made rapid progress in the software industry. Toast has since built software platforms that integrate outlets, like its own Kitchen display system. Other platforms include kitchen order management, data analytics, and payment processing. Although Toast is a relatively new entrant, it is already moving in on several existing leaders like OpenTable.
Toast has a similar profile to many emerging fintech software companies. While it is not yet profitable, it is currently entering hyper-growth mode and acquiring loyal customers. The toast has increased his income by a staggering 144% from 2021. Despite this, the stock trades only at 3.5 times sales. As the company continues to grow, its stock price will increase along with its revenue.
Adyen (ADYEY)
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Last on the list of Fintech stocks to buy is Adyen (OTC:ADYEY), a Dutch fintech company that provides a range of services to businesses and enterprises around the world. American investors may not be very familiar with Adyen, especially since it operates on the OTC markets and the Euronext exchange in Amsterdam. Nonetheless, projections are optimistic for this company and its results price target for ADYEY it is $22.61, which indicates an upside of almost 70% from the current price.
This fintech platform focuses on providing merchant services to receive payments via different methods such as credit cards and online banking. If you’re looking for some American comparisons, look no further To block (NYSE:m2) OR PayPal (NASDAQ:PYPL). For Adyen in particular, however, one of the biggest revenue drivers has been its land-and-expand approach, which has allowed it to build a strong network and recurring revenue within its customer base.
So why invest in Adyen? After all, you will pay a premium for stocks even on the OTC market. The shares trade at more than 20 times sales and 42.3 times future earnings. Nonetheless, Adyen’s financials look particularly strong, and it is even breaking even increased his net income at a CAGR of 40% over the last five years. As Adyen continues to grow its payment processing volume by double digits through 2026, investors should turn their eyes to this foreign fintech gem.
As of the date of publication, Ian Hartana and Vayun Chugh did not hold (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 InvestorPlace.com Guidelines for publication.
Chandler Capital is the work of Ian Hartana and Vayun Chugh. Ian Hartana and Vayun Chugh are both self-taught investors whose work has been featured in Seeking Alpha. Their research primarily revolves around GARP stocks with a long-term investment perspective encompassing diverse sectors such as technology, energy, and healthcare.