While most industries suffered significant losses last year amid the COVID-19 pandemic, the fintech space gained significantly with a surge in digital financial transactions. Investors’ interest in the fintech space is evident in Global X FinTech ETF’s (FINX) 30.1% gains over the past year…
And thanks to the spread of the hyper-contagious COVID-19 Delta variant, the resurgence of COVID-19 cases in several countries could spur an increase in demand for fintech solutions for the foreseeable future. In addition, the increasing adoption of artificial intelligence (AI)-based technology, online wallet, and even cryptocurrency transactions have been driving a shift toward a cashless society. According to The ExpressWire report, the fintech market is expected to grow at an 8.6% CAGR between 2021 – 2024.
Given this backdrop, we think it could be wise to bet on fundamentally strong fintech stocks Futu Holdings Limited (FUTU – Get Rating), SoFi Technologies, Inc. (SOFI – Get Rating), and Paysafe Limited (PSFE – Get Rating). Wall Street analysts believe these stocks have plenty of upside to deliver.
Headquartered in Hong Kong, FUTU is an international online brokerage and wealth management platform. The company provides trading, clearing, settlement services, margin financing and securities lending services, and a stock yield enhancement program. It also offers online wealth management services under its Futu Money Plus brand.
In May, Futu Clearing Inc. received a $400 million strategic capital injection from its parent company, FUTU. Ila Jehl, Futu Clearing’s CEO, said, “As Futu Holdings grows, so has the number of transactions handled by Futu Clearing, making it essential that we expand our capacity accordingly. The $400 million of capital infusion is a strong indication of Futu Holdings’ confidence in the U.S. markets and reflects a commitment to meeting the needs of global investors.”
FUTU’s net sales increased 349.4% year-over-year to $283.56 million for its fiscal first quarter ended March 31, 2021. Its gross profit grew 372.6% year-over-year to $226.56 million. Its adjusted net income increased 634.1% year-over-year to $151.67 million. And its EPS came in at $0.13, up 566.7% year-over-year.
Analysts expect FUTU’s EPS and revenue to increase 147% and 151%, respectively, year-over-year to $3.31 and $1.07 billion in its fiscal year 2021. It surpassed the Street’s EPS estimates in three of the trailing four quarters. The stock has gained 379.1% over the past year to close yesterday’s trading session at $137.95. Wall Street analysts expect the stock to hit $198.08 in the near term, which indicates a potential 43.6% upside.
SOFI is a digital financial services company that operates through three segments: Lending, Financial Services, and Technology Platform. The San Francisco company offers student loans, personal loans for debt consolidation and home improvement projects, and home loans.
On June 7, SOFI launched a new loan program to help ease borrower distress. Anthony Noto, SOFI’s CEO, said…
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