Undervalued fintech stocks are an increasingly important part of today’s financial landscape. In today’s rapidly evolving economy, financial technology, or fintech, plays a crucial role in helping businesses and individuals manage their finances.
Despite the countless benefits that fintech stocks offer businesses and investors alike, they often tend to be undervalued.
With cutting-edge technology at the core of these companies’ operations, they can stay ahead of the curve and deliver fast, reliable services to their customers. Yet many investors fail to recognize the true value of these stocks, instead focusing on traditional sectors such as healthcare or manufacturing.
If you’re looking for a way to maximize your portfolio’s earnings potential while also benefiting from the latest innovations in finance and technology, then investing in undervalued fintech stocks may be just what you need. Here are seven undervalued fintech stocks that could change your portfolio.
| COIN | Coinbase | $56.01 |
| HOOD | Robinhood | $11.00 |
| SOFI | SoFi | $5.22 |
| LMND | Lemonade | $19.15 |
| PYPL | PayPal | $83.01 |
| NRDS | NerdWallet | $13.76 |
| MELI | MercadoLibre | $949.33 |
Coinbase (COIN)
Coinbase (NASDAQ:COIN) is a digital currency exchange that allows users to buy and sell cryptocurrencies. The company has seen a huge influx of registered users as people are more interested in cryptocurrencies.
Coinbase has 108 million verified users at this point. Most of the uptick happened in the past year. This impressive growth was largely driven by the pandemic that swept through much of the world.
As people flooded into various cryptocurrencies in response to market volatility and fears about cash shortages, Coinbase became one of their primary destinations for trading and investing. Looking forward, it seems likely that Coinbase will continue to be a major player in the rapidly changing cryptocurrency landscape.
However, over the past year or so, Coinbase has seen a sharp decline in its user base and share price as the long crypto winter continues to take its toll. The prolonged bear market has hammered Coinbase investors, many of whom have experienced major losses over the past few months.
With new users hesitant to jump into the crypto space, Coinbase’s user base has also suffered, leaving it struggling to hold on to its position as one of the top exchanges in the industry.
Despite these challenges, Coinbase remains among the undervalued fintech stocks to buy for the long term. With some time and hard work, Coinbase can emerge from this period stronger than ever before.
Robinhood (HOOD)
Robinhood (NASDAQ:HOOD) is a revolutionary stock trading app that has completely transformed the world of finance. Thanks to its commission-free model and intuitive user interface, it has quickly become the go-to platform for both seasoned traders and amateurs looking to get started in the world of investing.
Even though Robinhood is already an established player in this space, many investors have been wary of investing in this fintech stock due to concerns about user growth. It’s worth noting that there was a steep drop in active monthly users from 21.3 million in Q2 2021 to 12.2 million in Q3 2022.
However, Robinhood has shown great resilience in the face of these challenges, deftly navigating through the third quarter and emerging stronger than ever before. Overall, despite recent setbacks, Robinhood is a company worth investing in for both short-term gains and long-term prosperity.
Robinhood Markets has just released its third-quarter results, with a net loss of $0.20 per share and revenue of $361 million. Compared to last quarter, this represents a significant improvement for the company – which highlights the success of Robinhood in recent months.
Robinhood also remains well-positioned to seize new opportunities in an ever-changing financial landscape. In short, Robinhood continues to be a major player in the world of finance, even as market conditions change around it.
SoFi (SOFI)
SoFi (NASDAQ:SOFI) is an online lender that offers personal loans, student loan refinancing, mortgage loans and investing products. The company has over four million members and $15.83 billion in assets. SoFi was founded in 2011 and has been one of the leading online lenders.
Traditionally, investors have been wary of SoFi’s focus on the student loan business. With its roots in the student lending space, this startup has garnered a reputation as being solely concerned with providing financing for higher education.
However, the company’s third-quarter earnings results indicate a massive expansion beyond this narrow focus. SoFi saw massive growth across all segments of its business, including mortgages and personal loans.
What’s more, its recent acquisitions suggest that it is planning to continue diversifying its offerings to meet shifting consumer needs. As such, SoFi’s overall positioning should give investors a reason to relax and feel more confident about its prospects moving forward.
Furthermore, clarity regarding the extension on the student loan moratorium, which will now end on Dec. 31, provides an additional tailwind for the company.
Lemonade (LMND)
Based in New York, Lemonade (NYSE:LMND) is a digital-first insurance service that leverages advanced data analytics to provide quick and customizable offers for its customers.
With its focus on meeting the needs of millennials, Lemonade has quickly gained popularity among younger consumers who value convenience and efficiency above all else.
Lemonade made a name for itself in the insurance industry for its innovative business model and user-friendly platform. Despite its rapid growth over the past few years, Lemonade recently announced that it is scaling back its spending plans due to increasing costs.
This decision is strategic, as it will allow the company to avoid raising capital in a market where capital costs have increased significantly. Lemonade’s focus on fiscal discipline and financial stability will give it a competitive edge moving forward, allowing it to continue delivering high-quality products and services to its customers.
PayPal (PYPL)
PayPal (NASDAQ:PYPL) is an incredibly popular and widely used platform for making payments online. PayPal offers users a robust, convenient solution for managing their finances, but it is also a great investment opportunity.
PayPal has long been a leading player in the world of digital payments, providing businesses and individuals with an easy and secure way to manage their finances online. However, despite PayPal’s impressive track record and widespread popularity, the company is facing some challenges in terms of growth.
CEO Dan Schulman attributes this slowing growth to a number of factors, including a challenging macroeconomic environment, declining e-commerce trends, and a highly unpredictable holiday shopping season.
Nevertheless, PayPal remains committed to growing its user base and expects to end the year with around 436 million active accounts. Whether or not PayPal can continue to grow exponentially remains to be seen, but one thing is clear: this popular payment platform shows no signs of fading into obscurity anytime soon.
NerdWallet (NRDS)
NerdWallet (NASDAQ:NRDS) is the go-to resource for anyone looking for credible, reliable advice regarding their money.
Inflation has been a hot topic in the news lately. In fact, it’s at its highest in decades. In 2022, 8.5% inflation rates led to the most severe economic difficulties ever since 1982. People are struggling now, but it also means they are looking for financial advice.
The number of monthly unique visitors for NerdWallet increased from 16 million in 2020 to 21 million in 2021. However, the figure is averaging 23.7 million per month at the moment.
NerdWallet reported Wednesday that their third-quarter earnings were better than analysts’ expectations. NerdWallet had an EPS of $0.01 on revenue of $142.6 million. These numbers were better than the polled investors expected, highlighting the viability of the company’s business model during these times.
With so many people seeking financial guidance right now, NerdWallet is sure to see significant secular growth. So if you are looking for a smart investment that will yield great results during these uncertain times, look no further than NerdWallet.
However, despite its excellent growth story, NRDS is in the red this year. Forward-thinking investors looking for undervalued fintech stocks will look at this as a great opportunity.
MercadoLibre (MELI)
MercadoLibre (NASDAQ:MELI) is one of South America’s most popular online marketplaces, offering a diverse selection of products and services to buyers and sellers around the globe. With millions of active users and a strong community focus, MercadoLibre has quickly become one of the go-to platforms for buying or selling online.
In its latest earnings report, MercadoLibre reported a year-on-year revenue increase of 45% to $2.69 billion, just below analysts’ expectations by about $10 million. Net profit increased 36% to $129 million, or $2.56 per share, handily beating analyst estimates.
MercadoLibre has grown at an impressive rate in recent years, fueled by the rapid expansion of e-commerce worldwide. Driven by the pandemic in early 2020, MercadoLibre’s growth rates saw a major jump, with GMV increasing by over 30% in many key markets.
The company experienced a much softer post-pandemic ‘landing’ than many other e-commerce companies, with its continued growth rates moderating back to more sustainable levels. Despite this, MercadoLibre remains one of the leading players in the e-commerce space.
With robust GMV numbers across its key markets and a strong foothold in this rapidly evolving industry, MercadoLibre is poised for even greater growth in the years to come.
Despite stellar operating metrics, the stock is down by double digits this year, which is why it makes it on this list of undervalued fintech stocks.
On the publication date, Faizan Farooque did not have (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 the InvestorPlace.com Publishing Guidelines.