Why Fintech Stocks Could be Set to Lead the Bull Move Ahead (SQ, AGBA, PYPL, TOP, SOFI, UPST, MELI)

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    The fintech industry has the potential to be a major growth success in the coming years due to a number of contributing factors.

    The increasing demand for financial services is one of the most important drivers. The global population is growing, and with it, the demand for financial services. Fintech companies are well-positioned to meet this demand by providing innovative and efficient financial services that are tailored to the needs of consumers and businesses.

    The rise of mobile technology is another major factor helping to drive the growth prospects of fintech leaders. Mobile technology is becoming increasingly ubiquitous, and fintech companies are using this technology to provide financial services that are convenient and accessible to consumers and businesses.

    The growing acceptance of digital payments is right in the bullseye in this equation because it allows for everything at scale. Digital payments are becoming increasingly popular, and fintech companies are at the forefront of this trend. Fintech companies are providing innovative and secure digital payment solutions that are making it easier for consumers and businesses to make payments.

    The regulatory environment for fintech is still evolving, but it is becoming more supportive of innovation. This is creating an environment where fintech companies can thrive and grow.

    If these factors continue to play out, the fintech industry could experience significant growth in the coming years. This could lead to new jobs, new investment opportunities, and a more efficient and accessible financial system.

    However, there are also some challenges that the fintech industry faces, including competition from traditional financial institutions, regulation, and security.

    Despite these challenges, the fintech industry has the potential to be a major growth success in the coming years. If the industry can overcome these challenges, it could provide a number of benefits to society, including new jobs, new investment opportunities, and a more efficient and accessible financial system.

    With that in mind, let’s take a look at some of the most interesting stocks in the space.

     

    Block Inc (NYSE: SQ) engages in creating ecosystems for distinct customer audiences. It operates through the Square and Cash App segments.

    The Square segment provides businesses the ability to accept card payments. The Cash App segment offers an ecosystem of financial products and services to help consumers manage their money.

    Block Inc (NYSE: SQ) recently announced new growth metrics and products for Square for Restaurants, its suite of offerings for restaurants and food and beverage businesses. The company has served hundreds of thousands of food and beverage businesses over the past decade and has grown upmarket over the last year as it continues to build products to help restaurateurs streamline and grow their businesses.

    Square launched Square KDS (kitchen display system) on Android, which integrates directly with Square Restaurant POS, keeping the front- and back-of-house in sync. Kitchen staff get a better view of incoming tickets on large, durable, and configurable screens, allowing them to see more orders, more clearly. Restaurants can tailor Square KDS to their kitchen’s workflow by routing tickets based on dining option – dine-in, takeout, etc. – or kitchen category, allowing for a more streamlined experience that gets meals out quickly and where they need to go.

    “Our [Square] KDS setup was so easy in our line kitchen,” said Rosa Thurnher, Co-Owner of El Ponce in Atlanta, GA. “Our tickets come in instantly for prepping orders and marking items as complete. It’s great to have that two-way ticket interaction that paper receipts can’t offer.”

    If you’re long this stock, then you’re liking how the stock has responded to the announcement. SQ shares have been moving higher over the past week overall, pushing about 11% to the upside on above average trading volume.

    Block Inc (NYSE: SQ) managed to rope in revenues totaling $5B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 26%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($6.5B against $8.7B, respectively).

     

    AGBA Group Holding Ltd (NASDAQ:AGBA) is a “busted SPAC”, in investor parlance. Busted SPACs are special acquisition companies that either made bad deals or weren’t able to make deals once they began trading at the $10/share level generally involved in SPAC deals. The most important thing to know here is this: Busted SPACs have become regular faces on the low-priced breakout stock list over the past year as investors realize that initial issues in the deal may open up big opportunities after share prices have already imploded.

    In AGBA’s case, the deal took a bit longer than expected and the stock fell precipitously from about $12/share to $1/share. But the deal did come together. And the situation could line up perfectly as yet another “busted SPAC” squeeze opportunity. AGBA bills itself as a leading one-stop financial supermarket in Hong Kong makes certain clarifications to their projected revenue, franchise strength, and engagement with investors and analysts.

    AGBA Group Holding Ltd (NASDAQ:AGBA), as previously stated in the disclosure of “AGBA Group Financial Projections 2023-2027 and Valuation Presentation” released on April 14, 2023, noted that it expected to achieve approximately US$160 million in revenue for 2023, which is equivalent to a 533% growth from the full year revenue in 2022 as reported in the Form 10-K for the fiscal year ended December 31, 2022.

    During the three years under COVID-19 impact from 2020 to 2022, the group maintained a solid revenue track record between US$69m to US$88m per annum.  AGBA expects that the current China’s border reopening will spur a new wave of revenue growth in 2023 and 2024.  Further disclosures and explanations can be found in the “AGBA Group Financial Projections 2023-2027 and Valuation Presentation” at www.agba.com/ir.

    The stock hasn’t yet popped up onto the radar of momentum meme investors. But it is situated in the Chinese Hong Kong fintech space, where we have seen a number of explosions over recent months. The stock bears attention.

    AGBA Group Holding Ltd (NASDAQ:AGBA) is situated in AGBA Tower in Wan Chai, a prominent business district in Hong Kong, serving as the headquarters of its core financial services business. With over 30 years of track record and a workforce of 2,600+ colleagues, the Group specializes in selling life insurance policies and mutual funds, making AGBA one of the largest and most established companies in the region.

     

    SoFi Technologies Inc (NASDAQ: SOFI) is a financial service platform, which engages in the provision of student loan refinancing options to the private student loan market. It offers home loans, personal loans, and credit cards. It operates through the following segments: Lending, Technology Platform, and Financial Services.

    The Lending segment includes personal loan, student loan, home loan products, and related servicing activities. The Technology Platform segment focuses on technology products and solutions revenue. The Financial Services segment includes the SoFi Money product, SoFi Invest product, SoFi Credit Card product, SoFi Relay personal finance management product, and other financial services such as lead generation and content for other financial services institutions.

    SoFi Technologies Inc (NASDAQ: SOFI) recently reported financial results today for its first quarter ended March 31, 2023.

    “We delivered another quarter of record financial results and generated our eighth consecutive quarter of record adjusted net revenue, which was up 43% year-over-year. We also generated our third consecutive quarter of record adjusted EBITDA at $76 million, representing a 48% incremental EBITDA margin and a 16% margin overall, as well as a 54% incremental GAAP net income margin,” said Anthony Noto, CEO of SoFi Technologies, Inc. “Strength across all three of our business segments — Lending, Technology Platform and Financial Services — drove these record results.”

    If you’re long this stock, then you’re liking how the stock has responded to the announcement. SOFI shares have been moving higher over the past week overall, pushing about 11% to the upside on above average trading volume.

    SoFi Technologies Inc (NASDAQ: SOFI) managed to rope in revenues totaling $607.7M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 71.8%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($3B against $0).

     

    Other key players in the fintech space include PayPal Holdings Inc (NASDAQ: PYPL), TOP Financial Group Ltd (NASDAQ: TOP), Upstart Holdings Inc (NASDAQ: UPST), and MercadoLibre Inc (NASDAQ: MELI).

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