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Stock market crashes present opportunities for long-term investors who can handle volatility and paper losses. You can only lose money on stocks if you sell them, and some companies stand to reward patient investors who remain strong during downturns.
The fintech industry is full of solidly performing companies with the potential to exceed market returns. Some of these companies have the potential to become multi-trillion dollar companies, while others have the potential to deliver extraordinary returns over the long term. These are some of the fintech stocks to watch in case the stock market goes into a sharp correction.
Sophie (SOFI)
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SoFi (NASDAQ:Sophie) is a digital bank that offers many banking services found in traditional banks. There are loans, credit cards, bank accounts, insurance policies, investment accounts, and other resources.
SoFi has made several moves to create more mainstream appeal, including acquiring the naming rights to SoFi Stadium and becoming the official banking partner of the NBA. Through these efforts and more, the company gained 585,000 new members in the fourth quarter of 2023. Financial results were also good. Revenue increased 35% over the previous year, and net income amounted to $48 million. This is a significant change from the company’s net loss in the same period last year.
These realists have driven SoFi’s profit margins to nearly 8%. This is a big change for the company and could result in a more attractive valuation. SoFi doesn’t have many of the drawbacks that financial institutions often have, such as high property taxes from thousands of branches.
Management also has a multi-year plan that suggests EPS of $0.55 to $0.80 per share in 2026. Even after achieving these benchmarks, SoFi still expects EPS to grow 20% to 25% year-over-year through 2026 and beyond. Achieving these milestones could make the stock price attractive. For long-term investors.
New Holdings (NU)
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New Holdings (New York Stock Exchange:Nuu) is a Brazilian digital bank primarily serving Latin America. The stock has outperformed the market, rising 33% since the beginning of the year and 112% over the past year.
This fintech company has been experiencing steady growth and generated a lot of excitement in its Q4 2023 print edition. The bank currently has 93.9 million customers and grew its customer base by 26% year-on-year in Q4 2023. The bank’s revenue also increased by 66% year over year, with net income jumping from $58 million in the fourth quarter of 2022 to $360.9 million in the fourth quarter of 2023. Did. Gross profit margin was approximately 48%.
Strong growth across the promising Latin American region suggests this stock could be an attractive stock over the long term. Investors should closely monitor this stock for declines. The stock trades at a P/E ratio of 56 times, but its rapidly increasing net income makes it easier to justify the valuation. The stock trades at a more reasonable forward P/E of 25.
Visa(V)
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visa (New York Stock Exchange:V) is a reliable long-term stock due to its huge market share in the credit and debit card industry. Consumers will continue to use debit and credit cards for: Compensation, convenience, trust building, and other factors.
Visa makes a small profit from each transaction, and this business model works wonders. The fintech company reported a 10% year-over-year increase in revenue and a 12% year-over-year increase in net income for the second quarter of fiscal 2024. Cross-border volumes were the main driver of the 16% year-on-year increase. CEO Ryan McInerney said consumer spending remained stable in the quarter.
Visa’s stock price has risen about 70% over the past five years, and analysts believe it could continue to rise. The average price target suggests an upside of 17% from current levels. The highest price target of $340 per share suggests 27% upside potential. Visa is currently rated a Strong Buy by 23 analysts.
On the date of publication, Mark Guberti held a long position in SOFI. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publication guidelines.
