The 3 Most Undervalued Fintech Stocks to Buy Now: August 2023

Stocks to buy

Financial Technology (fintech) stocks have come to revolutionize the financial industry. With all their improvements, technology and sophisticated yet simple processes, they undoubtedly offer all consumers friendly, efficient, fast and completely effective tools to carry out all our banking needs. However, the companies did not come to displace traditional banking. Instead, they complemented those financial institutions offering each of us a better financial ecosystem in our day-to-day life. Here are three undervalued fintech stocks to buy in August.

Block (SQ)

Block logo over a background with former square logo. SQ stock.

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Imagine Block (NYSE:SQ) as that friend that makes payments super easy and fast, like snapping your fingers! Jack Dorsey, one of the founders of Twitter, created the business. The company makes paying for things and handling money a breeze, especially for small businesses and people like you and me.

And here’s an exciting fact. Despite the world going through tough times, Block managed to stay strong. During the company’s second quarter, it earned $5.53 billion in revenue, up from $4.4 billion a year earlier. Wow! That means a lot of people are still using the services — a great sign Block is doing a good job.

And it doesn’t stop there. Recently, Block came out with new features and products. The company is launching new things to help different types of businesses, regardless of size. Block’s mission is to supply businesses with the tools to help them become bigger and stronger. That’s not only good for companies and the economy but for Block too.

Shift4 Payments (FOUR)


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Shift4 Payments (NYSE:FOUR) is the spark behind how we pay online and in stores. The company’s technology makes it easy for stores to receive money securely and quickly. When you buy something online and see a button that says “Pay with Shift4” on the screen, that’s Shift4 Payments in action.

Why would you even think about having Shift4 in your financial portfolio? Well, because the company is making giant strides. In the second quarter of 2023, FOUR showed impressive numbers. It handled a large amount of end-to-end payments for a total value of $26.8 billion. That’s a whole lot of money moving! The company’s revenue increased 26% to $637.0 million year-over-year (YoY). And profits also skyrocketed, rising 61% to $158.7 million.

These aren’t just crazy numbers, Shift4 is also doing incredible things. The company launched a magic trick to help restaurants. If the food establishments use Shift4’s point-of-sale (POS) system to receive online orders, they get paid an extra $1 per order for the first three months. Plus, if a restaurant wants to switch from another system, Shift4 will even give them a bonus of up to $5,000 to make the switch. Impressive!

Oh, and if that wasn’t enough, the NHL’s Florida Panthers chose Shift4 to handle game ticket payments. That means fans who want to watch hockey can pay easily and seamlessly, expanding FOUR’s reach into the athletic realm.

Fiserv (FI)

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Fiserv (NYSE:FI) is like the genius behind the scenes that makes banks and financial companies super fast and convenient in the digital age. The company is like a craftsman of financial technology, helping banks deliver great services online and in their apps. Think of Fiserv as the tech friend who makes paying and managing your money as easy as clicking a button.

Fiserv might be a good candidate to add to your investment portfolio. You already know everything is going digital in the financial world, right? Well, Fiserv is right in the middle of it. The business’ designs are smart, meaning more and more people will want their solutions, which could make FI stock worth more over time.

Let’s talk numbers. During the second quarter of 2023, Fiserv posted a 6% increase in adjusted revenue year-over-year — a nice rebound from Q1. Its adjusted earnings per share also increased by 16% YoY and boasted a 300 basis point bump in its adjusted operating margin YoY to 36.5%. Not only were those numbers impressive, but the company is also looking ahead optimistically, expecting revenue to continue growing by 9% to 11% this year.

And wait, there’s more! Fiserv also partnered with Amazon (NASDAQ:AMZN). Now, if you have an eligible debit or credit card, you can use your rewards points to shop on Amazon. Cool, right? Sunoco (NYSE:SUN) also chose Fiserv to bring in more income and make its stores cooler. Thanks to them, consumers will be able to buy gas or chips from their car, at the pump or through the app. That sounds like a lot of convenience and financial joy, making Fiserv — which has been everywhere lately — a good undervalued fintech pick for your portfolio.

As of this writing, Gabriel Osorio-Mazzilli 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 the Publishing Guidelines.

Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.