The recent pandemic behaviors have benefited fintech stocks tremendously. The government’s stay-at-home order has facilitated fintech firms as digital payments are taking precedence over cash purchases amid lockdown. As a result, many brick-and-mortar stores are turning to contactless payment to limit the spread of viruses. For this reason, top fintech stocks have been seeing an accelerated adoption in their services and transactions at an unprecedented pace.
Financial technology services, or fintech, have been a growing sector. This comes as many financial services related companies incorporate technology into their innovation. For instance, we saw how companies like Amazon (AMZN Stock Report), Alibaba (BABA Stock Report), and Shopify (SHOP Stock Report) benefited tremendously from online spending during the pandemic. And these e-commerce companies require a good working relationship with financial intermediaries. As a result, fintech stocks are well-positioned to benefit immensely. After all, e-commerce’s success is fintech’s success. Given the sharp increase in the use of fintech amid the global health crisis, here’s a list of top fintech stocks to buy that are poised for growth.
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The digital payment processor, PayPal (PYPL Stock Report) have had their best quarter ever. Perhaps it did not receive the same attention as the mega-tech stocks. But PYPL stocks have outperformed most of the mega-tech stocks. This came after the company surprised even the most bullish analyst on Wall Street. PayPal reported revenue of $5.26 billion, up 22% year over year. Profits were spectacular too, with earnings per share (EPS) of $1.29. On the other hand, the operating cash flow growing to $2.38 billion has more than doubled year-over-year.
Since the company’s inception in digital payment, PayPal’s business model so far has depended largely on e-commerce payments. Most stores are also accepting digital payments now. And this could be the perfect time to invest in contactless payments, as well as consumer banking. As Joseph Vafi at Canaccord Genuity said, “One of the company’s top priorities is to roll out QR code functionality in the US.”
Recently, PayPal announced a partnership with CVS Health (CVS Stock Report) to introduce QR-code payment options in over 8,200 pharmacy stores in the fourth quarter this year. PayPal is also expanding globally. The company entered into a partnership with Gojek, a super-app in Southeast Asia. This move essentially brought PayPal to 170 million new users. Separately, PayPal also became a payment option on the e-commerce platform MercadoLibre (MELI Stock Report) in Brazil and Mexico. It is also offering cross-border payment options in these two countries. Will these partnerships bring PYPL stock to new heights?Top Fintech Stocks To Buy In August: Square
Shares of Square (SQ Stock Report) soared after posting better than expected quarterly results. Square also witnessed strong growth in its Cash App payment method. The company reported $1.92 billion in net revenue for the second quarter, representing a 64% year-over-year jump. Adjusted earnings per share came in at 18 cents. This was far better than the 5 cent loss analysts polled by Refinitiv had expected. This came after the company saw the recovery in the gross amount of cash its retailer clients were moving across its payment networks.
Now SQ stock sits at an all-time high during intra-day trading on Tuesday after beating earnings estimates. The coronavirus crisis has accelerated contactless payments, and in the case of Square, its Cash App has fueled considerable growth.
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Shares of China’s OneConnect Financial Technology (OCFT Stock Report) have doubled in value year-to-date. This is despite OCFT stock surging more than 150% since its IPO in December 2019. Still, this Chinese fintech seems to be well-positioned for potential upside over the long-term. The fintech company was formed under Chinese insurance giant Ping An (PNGAY Stock Report). Therefore, it can leverage its relationship with its mother company to gain more market share. In fact, the company is specifically tailored for insurance and banks in Asia.
OneConnect stock was up for grabs after the company signed an agreement to provide financial and smart supervision services to the finance authority of Hainan, China’s smallest and southernmost province. The fintech company will also perform the same duties for Hainan Free Trade Port. Many of its clients are still using outdated systems.
Thus, this presents a major opportunity for the fintech firm to serve its native and regional clients. The company believes that its potential market in China and Southeast Asia could reach $123 billion by 2023. That said, is OCFT stock a top fintech stock to buy?