3 Fintech Stocks You Can Buy Right Now

But with the industry has long-term staying power and here are some of the top fintech stocks you can buy right now and hold for the next decade with confidence.

 

Operating as the crucial middleman in an increasingly complex Fintech universe, Marqeta (MQ) is fast becoming the go-to service for customer-facing companies seeking payment processing infrastructure and digital banking solutions.

 

Marqeta (MQ) has been building up some serious momentum of late, with a raft of high-profile partnerships and a stellar Q3 earnings report.

 

The company’s growing list of customer’s reads like a who’s who of the Fintech industry’s major players: Uber (UBER), who’ve been using Marqeta as its global card issuer since 2020, has now brought Uber Freight onboard too, while Bill.com (BILL), a cloud-based billing platform that automates back-office accounting operations for SMEs (small and small or medium-sized enterprises) has also just teamed up with MQ to better facilitate money transfers for its single-use expense cards.

 

But it is Marqeta’s quarterly results that will really have investors salivating. The firm’s revenues spiked 56% year-on-year to $131.5 million – well above the Wall Street estimate of $119.2 million – while gross profits were up 67% at $59 million for the quarter, with a GAAP earnings beat of an $0.08 loss per share coming in at $0.09 above analyst predictions.

 

 

With the business expanding at the rate it is, it came as little surprise to onlookers when Marqeta’s management upgraded its Q4 revenue outlook to between $134-$139 million from a consensus figure of $125.8 million.

 

MQ’s European operations continue to demonstrate strong growth, with its European consumer base doubling since September 2020, and its total number of transactions for the region increasing by more than 340% year-on-year.

 

The company is expanding its existing partner and product ecosystem too, as new programs such as M1 Finance’s new card programs are onboarded, and Mastercard’s Installments Program announced MQ as its infrastructure of choice to support its various BNPL initiatives.

 

And with talk of exponential growth in the embedded finance space hotting up, Marqeta’s early-mover advantage  – and enviable partnerships  – position it perfectly to capitalize on what could become a $7 trillion market opportunity.

 

Shares in American online personal finance business SoFi (SOFI) have had a turbulent year so far.

 

Having only gone public in July 2021, the San Francisco-based banking disrupter saw its stock fall from opening week highs of around $24 to lows of $13 just a couple of months later. But since then, SOFI has managed to claw back almost all its lost gains to trade nearly double what it was during its mid-August nadir.

 

In fact, the company is up 44% in the last five weeks, with no sign of its current trajectory changing anytime soon. So what happened?

To begin with, the market reacted sharply to news contained in SoFi’s August Q2 earnings results that the company had posted a net loss of over $150 million for the quarter.

 

The subsequent sell-off plunged the firm’s shares to a level not entirely justified by the company’s overall performance, certainly given that revenue for the quarter was up 74% year-on-year and its usage metrics across many domains were growing by triple figures. That said, muted guidance for the second half of 2021 didn’t help either, and the stock inevitably fell.

 

However, skip forward to this month’s latest Q3 numbers, and the market sentiment had reversed a full 180 degrees. SOFI completely blew away any notion of lagging growth figures, instead smashing user acquisition estimates with 350,000 new customers during the quarter, at the same time showcasing a 96% increase in total platform membership at 2.94 million.

 

Throw in both revenue and bottom-line earnings beat, a fifth consecutive quarter of positive non-GAAP adjusted EBITDA, and a total products growth of 108%, and its recent stock price surge seems well justified.

 

But SoFi (SOFI) promises so much more than this in the coming years. The company is a truly revolutionary prospect, has already established itself as a favorite with the tech-savvy Generation Z, and still has its sights set on taking market share from legacy financial institutions too.

 

Its diverse product offerings, including homes loans, personal loans, savings, student finance, and investments, as well as its Galileo payments platform which handles $100 billion of payments annually, will see it continually generate high levels of revenue. And once the business turns consistently profitable, the sky’s the limit for SoFi.

 

Fintech companies are often coveted for their potential to be huge growth businesses over the long term, with their valuations reflecting this fact in what can sometimes seem absurdly high price metrics.

 

Affirm (AFRM), a leader in the relatively new “buy now, pay later” (BNPL) space – where customers can purchase goods on credit and offset payment until a later date – is one such business, whose price-to-cash flow ratio stands at an eye-watering multiple of 237. But, overlooking its heavy premium, AFRM might be one enterprise that is actually worth paying over the odds for.

Like so many other Fintechs right now, much of Affirm’s success has been predicated on the quality of the partnerships – both strategic and commercial – that’s it’s entered into thus far. Indeed, Affirm has just inked a massive deal with arguably the world’s most important e-commerce giant, Amazon (AMZN).

 

The agreement, now exclusive between the two parties, ensures that Affirm is the only non-traditional credit card BNPL provider that can operate on Amazon’s platform. However, there’s a sting in the tail: Affirm has had to give up potentially 27 million of its shares to Amazon at a price, that at current valuations, is well below what they’re worth on the open market today. Furthermore, there’s nothing to stop legacy credit providers from swooping in and offering their own BNPL services to Amazon customers either.

 

Despite some drawbacks to the Amazon deal, Affirm expects to reap a large revenue haul from the agreement and, as its 25% price surge after the announcement of the partnership attests, the market seems to like the look of the relationship too.

 

But the real problem for AFRM is that, even with a Q1 2022 revenue increase of 55%, the business is still overall a loss-making enterprise, with its latest bottom-line numbers missing analyst expectations with an EPS of negative $1.13.

 

 

And yet, none of this matters at the moment. Affirm is aggressively focused on growing its revenues right now. Active customers are up 124% over the year, with active merchants even higher at 1,468%. Affirm is playing to win in the BNPL space, and might just pull it off. As this method of financing becomes more entrenched, the potential for AFRM is extraordinarily high.