July 21, 2024

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These Could Be the Best-Performing Fintech Stocks Through 2030

2 min read

Most of the stock market headlines I’ve seen recently have to do with things like Nvidia (NASDAQ: NVDA) becoming the largest company in the United States or the S&P 500 reaching new record highs. But not all stocks are doing quite so well.

This is especially true in the financial technology, or fintech industry, where many stocks have pulled back significantly from their highs reached during the days of zero-interest rate policy. And while some fintech stocks certainly have some big red flags for investors, here are three in particular that I think could deliver market-beating returns over the next several years.

An uncertain strategy but a massive ecosystem

PayPal (NASDAQ: PYPL) is down by about 80% from its 2021 peak, and it’s easy to understand why. As the COVID-19 pandemic died down, member growth stalled, and the company’s path to future-earnings growth was uncertain. However, the stock could be an excellent value for those who believe in the power of PayPal’s ecosystem and in its new management team.

The company has 427 million active users on its platform and has done an excellent job of increasing engagement with its user base. In fact, PayPal’s average-active account now completes 13% more transactions than a year ago. The company is generating over $5 billion in annual free cash flow and is using virtually all of it to buy back stock, a good indicator that management thinks it’s a great value.

Speaking of management, PayPal not only has a new CEO, but virtually the entire executive leadership team has joined the company within the last six months. So far, the team is doing a great job of figuring out next steps, such as the recent announcement that PayPal is starting an advertising business, and I’m looking forward to seeing how it evolves.

Impressive growth and profitability, with many levers to pull

Banking disruptor SoFi (NASDAQ: SOFI) continues to grow impressively despite the difficult economic climate. Over the past year, SoFi’s membership base has…

2024-06-22 06:18:00

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