S&P 500   3,767.96 (-0.40%)
DOW   30,132.81 (-0.47%)
QQQ   280.43 (-0.55%)
AAPL   146.00 (-0.27%)
MSFT   247.65 (-0.62%)
META   137.54 (-1.04%)
GOOGL   101.61 (+0.18%)
AMZN   119.93 (-0.84%)
TSLA   236.64 (-1.73%)
NVDA   132.54 (+0.34%)
NIO   15.10 (-5.86%)
BABA   83.81 (-0.69%)
AMD   68.11 (+0.25%)
T   15.56 (-2.32%)
MU   53.74 (-1.81%)
CGC   2.98 (-2.93%)
F   12.22 (-2.32%)
GE   66.56 (-1.30%)
DIS   100.43 (-0.37%)
AMC   7.32 (-0.14%)
PYPL   94.39 (+0.60%)
PFE   43.46 (-1.50%)
NFLX   235.37 (-0.57%)
S&P 500   3,767.96 (-0.40%)
DOW   30,132.81 (-0.47%)
QQQ   280.43 (-0.55%)
AAPL   146.00 (-0.27%)
MSFT   247.65 (-0.62%)
META   137.54 (-1.04%)
GOOGL   101.61 (+0.18%)
AMZN   119.93 (-0.84%)
TSLA   236.64 (-1.73%)
NVDA   132.54 (+0.34%)
NIO   15.10 (-5.86%)
BABA   83.81 (-0.69%)
AMD   68.11 (+0.25%)
T   15.56 (-2.32%)
MU   53.74 (-1.81%)
CGC   2.98 (-2.93%)
F   12.22 (-2.32%)
GE   66.56 (-1.30%)
DIS   100.43 (-0.37%)
AMC   7.32 (-0.14%)
PYPL   94.39 (+0.60%)
PFE   43.46 (-1.50%)
NFLX   235.37 (-0.57%)
S&P 500   3,767.96 (-0.40%)
DOW   30,132.81 (-0.47%)
QQQ   280.43 (-0.55%)
AAPL   146.00 (-0.27%)
MSFT   247.65 (-0.62%)
META   137.54 (-1.04%)
GOOGL   101.61 (+0.18%)
AMZN   119.93 (-0.84%)
TSLA   236.64 (-1.73%)
NVDA   132.54 (+0.34%)
NIO   15.10 (-5.86%)
BABA   83.81 (-0.69%)
AMD   68.11 (+0.25%)
T   15.56 (-2.32%)
MU   53.74 (-1.81%)
CGC   2.98 (-2.93%)
F   12.22 (-2.32%)
GE   66.56 (-1.30%)
DIS   100.43 (-0.37%)
AMC   7.32 (-0.14%)
PYPL   94.39 (+0.60%)
PFE   43.46 (-1.50%)
NFLX   235.37 (-0.57%)
S&P 500   3,767.96 (-0.40%)
DOW   30,132.81 (-0.47%)
QQQ   280.43 (-0.55%)
AAPL   146.00 (-0.27%)
MSFT   247.65 (-0.62%)
META   137.54 (-1.04%)
GOOGL   101.61 (+0.18%)
AMZN   119.93 (-0.84%)
TSLA   236.64 (-1.73%)
NVDA   132.54 (+0.34%)
NIO   15.10 (-5.86%)
BABA   83.81 (-0.69%)
AMD   68.11 (+0.25%)
T   15.56 (-2.32%)
MU   53.74 (-1.81%)
CGC   2.98 (-2.93%)
F   12.22 (-2.32%)
GE   66.56 (-1.30%)
DIS   100.43 (-0.37%)
AMC   7.32 (-0.14%)
PYPL   94.39 (+0.60%)
PFE   43.46 (-1.50%)
NFLX   235.37 (-0.57%)

7 Fintech Stocks That Will Continue To Disrupt Traditional Banking

7 Fintech Stocks That Will Continue To Disrupt Traditional BankingIn April 2021, JPMorgan Chase CEO Jamie Dimon described fintech companies as one of the “enormous competitive threats” to traditional banking. And with good reason. Fintech (short for financial technology) is not just “digital banking.” It’s a different approach to banking that traditional banks will not be able to replicate by outspending their competitors.

You see, cryptocurrency is getting a lot of attention for the way it’s disrupting the monetary system. But before there was bitcoin (CCC: BTC-USD), there was fintech.

What started out as a way to send money from one person to another without the need for a bank (i.e. peer-to-peer lending) has morphed into much more. Today, individuals and businesses can get loans, invest, and pay bills conveniently and securely. And they can do so without ever having to set foot into a bank.

Financial technology is democratizing finance for many individuals who have been left behind by the traditional banking system. The “unbanked” is a huge target audience. But whereas fintech started as reaching those that were unbanked out of necessity; it is cultivating a new audience among those who are going unbanked by choice.

In this special presentation, we’ll look at seven fintech companies that are leading in this space today and will do so well into the future.

Quick Links

  1. SoFi Technologies
  2. PayPal
  3. Square
  4. Mastercard
  5. Visa
  6. Fiserv
  7. Zuora

#1 - SoFi Technologies (NASDAQ:SOFI)

SoFi Technologies logo

SoFi Technologies (NASDAQ: SOFI) has been in business since 2011 but it only recently began publicly trading under the ticker symbol SOFI. Of all the companies on this list, SoFi looks the most like a traditional bank.

Digital banking is about convenience. Fintech companies are about connection. Members access SoFi’s suite of tools through its mobile app. Through the app, SoFi gives users information that can help them make wiser personal financial decisions. They can also pay down student debt, obtain a mortgage, and invest in stocks and bonds. The company also uses a points-based reward system that members can redeem in a variety of ways including converting them into cryptocurrency.

Since going public, SOFI stock has been trading in a wide but defined range. Investors don’t question the company’s revenue. Unlike some companies that go public via a SPAC, SoFi has significant revenue largely due to continued growth in its user basis which now numbers over 1.9 million unique members. However, it’s not profitable yet. But it claims that it will be this year. If that happens, buying shares at their current level will look like a bargain.

About SoFi Technologies

SoFi Technologies, Inc provides digital financial services. It operates through three segments: Lending, Technology Platform, and Financial Services. The company's lending and financial services and products allows its members to borrow, save, spend, invest, and protect their money. It offers student loans; personal loans for debt consolidation and home improvement projects; and home loans. Read More 
Current Price
$5.21
Consensus Rating
Buy
Ratings Breakdown
10 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$13.36 (156.4% Upside)




#2 - PayPal (NASDAQ:PYPL)

PayPal logo

A common theme among these fintech companies is growth. And PayPal (NASDAQ: PYPL) demonstrates this better than most. The company reported earnings on July 28 and beat expectations for both revenue and earnings. Net revenue hit $6.24 billion which was a 17% year-over-year increase.

PayPal is one of the biggest automatic payment companies in the world. It currently has over 300 million merchants that use its platform. And customers may also engage with PayPal through its Venmo, Xoom, and Braintree brands. The company offers business debit and credit cards.

And through its Working Capital program gives many small businesses the opportunity to obtain a small business loan without having to go through a bank and without a credit check. The program’s algorithm calculates the ability to pay based on the volume of sales.

PYPL stock is up over 54% in the last 12 months. However, since the company reported earnings, the stock is dropping on weaker than expected guidance. The simple advice is to use this as a time to buy the dip.

About PayPal

PayPal Holdings, Inc operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company's payments platform allows consumers to send and receive payments in approximately 200 markets and in approximately 100 currencies, withdraw funds to their bank accounts in 56 currencies, and hold balances in their PayPal accounts in 25 currencies. Read More 
Current Price
$94.39
Consensus Rating
Buy
Ratings Breakdown
30 Buy Ratings, 13 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$134.23 (42.2% Upside)




#3 - Square (NYSE:SQ)

Block logo

Square (NYSE: SQ) and PayPal are sometimes viewed as two sides of a coin. That’s not entirely accurate. And it probably undersells Square’s capabilities. Square is known for its cutting-edge payment and point-of-sale solutions that allow merchants to use their mobile devices to collect digital payments via a credit or debit card.

However, like PayPal, Square gives its customers so much more than just a way to process payments. It does offer the ability for peer-to-peer lending through its CashApp. And it is getting ready to launch Square Banking which will allow it to offer its customers checking accounts, savings accounts, debit cards, and loans. By keeping their customer’s money within the Square ecosystem, they will have little need for a traditional bank.

SQ stock is up nearly 100% in the last 12 months. And while the stock price is currently at the upper end of analysts’ estimates, the stock still carries an Overweight rating from the analysts that cover the stock.

About Block

Square, Inc provides payment and point-of-sale solutions in the United States and internationally. The company's commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions. It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts EMV® chip cards and Near Field Communication payments; Chip card reader, which accepts EMV® chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions. Read More 
Current Price
$61.73
Consensus Rating
Buy
Ratings Breakdown
32 Buy Ratings, 7 Hold Ratings, 1 Sell Ratings.
Consensus Price Target
$135.76 (119.9% Upside)




#4 - Mastercard (NYSE:MA)

Mastercard logo

Mastercard (NYSE: MA), the world’s second-largest payment processor, has been an ideal recovery stock. Millions of Americans paid down their credit card debt during the pandemic. Now the reopening gives them a reason to start putting their credit to use.

And the headline numbers of the company’s latest earnings report support the company’s growth.  Mastercard reported $2.08 in earnings per share on $4.5 billion in revenues giving the company on both the top and bottom lines.

International transactions make up two-thirds of Mastercard’s $1.9 trillion value. This shows both the risk and reward for MA stock in the short term. On the one hand, there is a tremendous upside to the stock since the international market still lags behind the United States. However, with the Delta variant causing shutdowns in some international markets, it could slow Mastercard’s growth in the second half of the year.

MA stock is up 25% in the last 12 months, but with a gain of 10%, it is lagging the S&P 500 in 2021.

About Mastercard

Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. It facilitates the processing of payment transactions, including authorization, clearing, and settlement, as well as delivers other payment-related products and services. Read More 
Current Price
$302.20
Consensus Rating
Buy
Ratings Breakdown
13 Buy Ratings, 1 Hold Ratings, 1 Sell Ratings.
Consensus Price Target
$413.36 (36.8% Upside)




#5 - Visa (NYSE:V)

Visa logo

For much of the last 12 months, Visa (NYSE: V) stock was treading water. But analysts and investors now appear to be giving the stock the attention it deserves. After the company reported strong earnings, nine analysts boosted their price targets for the company’s stock. And while the consensus estimate only suggests the stock will gain about 8.5%, the recent price targets suggest there is more growth ahead.

I see two short-term catalysts for Visa. The first is its acquisition of Tink, a European-based open banking platform. The second is the company’s embrace of cryptocurrency. Visa allows consumers to make transactions in USD Coin (CCC: USDC), a stable coin that is powered by the Ethereum (CCC: ETH-USD) blockchain.  Using a stable coin means users don’t have to convert cryptocurrency into fiat money.

By itself, the acceptance of cryptocurrency is intriguing. However, traditional banks are already exploring their own digital currencies including stable coins. This puts Visa in the driver’s seat for getting this business.

About Visa

Visa Inc operates as a payments technology company worldwide. The company facilitates digital payments among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a transaction processing network that enables authorization, clearing, and settlement of payment transactions. Read More 
Current Price
$186.94
Consensus Rating
Buy
Ratings Breakdown
16 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$257.28 (37.6% Upside)




#6 - Fiserv (NASDAQ:FISV)

Fiserv logo

Fiserv (NASDAQ: FISV) is one of the oldest fintech stocks. For over 35 years, the company has been providing solutions that facilitate digital payments and account processing services in all forms. The company has 1.4 billion global accounts that include 10,000 financial institutions. Fiserv processes 12,000 financial transactions every second.

Since falling to an all-time low at the onset of the pandemic, FISV stock has rallied by over 40%. And in the company’s most recent earnings report on July 27, they scored a beat on both the top and bottom lines. The $4.05 billion in revenue was the most the company had recorded since the fourth quarter of 2019.

One reason for the optimism is the company’s acquisition of Ondot Systems which allows Fiserv to expand the solutions that it can offer its existing and potentially future clients.

FISV stock is up 12.9% in the last 12 months. Analysts are bullish on the stock and give it a 15% upside from its current level.

About Fiserv

Fiserv, Inc, together with its subsidiaries, provides payment and financial services technology worldwide. The company operates through Acceptance, Fintech, and Payments segments. The Acceptance segment provides point-of-sale merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; Carat, an omnichannel commerce solution; Clover, a cloud-based point-of-sale and business management platform; and Clover Connect, an independent software vendors platform. Read More 
Current Price
$100.37
Consensus Rating
Buy
Ratings Breakdown
15 Buy Ratings, 9 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$124.54 (24.1% Upside)




#7 - Zuora (NYSE:ZUO)

Zuora logo

Last, but not least, is Zuora (NYSE:ZUO). This company is not a pure-play on fintech. Rather they provide the tools that companies need to operate in what Zuora brands as the Subscription Economy.

The company recently closed out its fiscal year for 2021. The company posted a year-over-year revenue increase of 6%. However, what should interest investors is the growth in earnings which improved from a negative 52 cents per share to a negative 25 cents per share. While still not profitable, the company is trending in the right direction and investors are taking notice. Institutional buying has outweighed selling in the last four quarters. And in the last quarter, institutions scooped up more of ZUO stock than at any time in nearly two years.

ZUO stock has not been heavily covered by analysts in the last year. However of the three analysts that have provided a rating, the stock is forecast to have a 6% upside. And with a market cap of just over $2 billion, the stock looks attractively priced.

About Zuora

Zuora, Inc, together with its subsidiaries, provides cloud-based software on a subscription basis that enables companies in various industries to launch, manage, and transform into a subscription business. The company offers Zuora Central platform that acts as an orchestration engine that allows customers quote-to-revenue operations. Read More 
Current Price
$7.83
Consensus Rating
Buy
Ratings Breakdown
2 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$17.50 (123.5% Upside)



 

For fintech stocks to truly take over the banking world, they will have to be able to do some things that they currently cannot. For example, one limitation to fintech companies is their inability to assist in transactions that require verification of a credit score (i.e. mortgage lending).

This, more than the technology itself, is what steers some older consumers away from fintech. As homeowners and with other commitments, fintech may not speak to their financial needs. Fintech companies targeted millennial and Gen-Z consumers because of the sheer size of the potential market. And before the recent housing boom, this wasn’t much of an issue.

However, an important benefit of fintech companies is that they can more easily integrate with cryptocurrency. In fact, cryptocurrency is one of the main areas that fintech companies are trying to cultivate along with other leading-edge technologies such as blockchain, smart contracts, and open banking.

More Investing Slideshows:


MarketBeat Resources

Premium Research Tools

MarketBeat All Access members have access to premium reports, best-in-class portfolio monitoring tools, and our latest stock picks.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies, and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | contact@marketbeat.com | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Privacy Policy | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart's disclaimer.