Financial technology has taken the world by storm as one of the most important sectors of the economy.
With the adoption of artificial intelligence (AI) and innovation in technology, the fintech sector is expanding at a rapid pace. A report by McKinsey highlights that the revenue in the fintech space is set to grow about three times faster than the revenue in traditional banks between 2023 and 2028. Fintech stocks are set to benefit from the transformation of the industry, and we could see the companies report impressive financials in the coming years.
Therefore, if you want to make the most of the fintech growth, explore these fintech stocks under $100 to grab today.
SoFi Technologies (SOFI)
SoFi Technologies (NASDAQ:SOFI) started with an aim to transform traditional banking. So with the banking collapse in 2023, it earned the trust and loyalty of many users. Today, it is one of the best fintech companies out there, and its numbers prove the same. The company ended the year with 7.5 million users, reporing the first ever GAAP profit.
SOFI saw a significant rise in the demand for its lending products, a major revenue-generating segment. While it still dominates the revenue, the company wants to steadily move toward the financial services segment. In fact, management is investing in its financial and tech segments which could see growth in the next two years.
Additionally, they aim to add at least 1 million users each quarter this year. The company operates in a massive industry, and disruption is evident. It has managed to keep operating costs at a minimum, helping to achieve revenue growth. Its financial services segment grew over 100% in Q4, proving the company’s investments are paying off.
Over the past year, the stock is up 39% and is exchanging hands for $7.68 today. The management aims for a revenue growth rate of 20% to 25% by 2026. If the company keeps the momentum going, the stock can double in the coming months.
As we gear up for an interest rate cut, SoFi Technologies is set to benefit. It could see a significant improvement in the top line, and the home loan segment could get a boost. SOFI is a high-growth business and one that has already proved its strength.
PayPal (PYPL)
PayPal Holdings (NASDAQ:PYPL) had an excellent 2021 where it soared over 600%. But unfortunately, it lost all of its gains. However, this means the company could have massive upside potential if it can manage to recover the lost momentum.
With its earnings bouncing back in 2023, it is taking steps to improve profitability. The company has already cut the workforce last year and will have another round this year. It is improving the service through AI to attract more users.
PYPL has seen a rise in the payment processing volume and the number of payment transactions. This has helped the revenue grow but the management had a disappointing guidance for 2024, impacting the stock. It expects the first quarter revenue growth of 6.5% and the EPS to be in line with the $5.10 it achieved last year.
In the recent Innovation event, the company displayed its AI-powered offerings and introduced Fastlane and PayPal Checkout besides four other innovations. Fastlane will enable quick, one-tap purchases while PayPal Checkout will allow face and fingerprint recognition. Also, it will be using AI to offer personalized offers to customers which will subsequently drive business growth.
Additionally, with a strong global presence, the stock is fairly valued right now. It is exchanging hands for $60 and is down from the 52-week high of $77. While it may not be possible for the stock to surge immediately, it could keep moving upward slowly but steadily. Do not write off PayPal yet.
Robinhood (HOOD)
Robinhood (NASDAQ:HOOD) is a fintech frontrunner and a popular online brokerage. The company went public in 2021 and is known for the zero-commission trading it offers on the platform. HOOD is one of the fintech stocks to grab while you can.
The company has helped beginner investors get on the platform and enter the stock market without worrying about the high fees. Trading at $16 today, the stock is up 36% year to date (YTD) and 87% in the year. It is extremely close to the 52-week high of $17.
Further, HOOD reported an impressive quarter and expects strong profit and growth in 2024. It managed to crush analyst expectations with a renewed interest in cryptocurrencies and high-interest income.
Its assets under custody (AUC), which is the market value of all the financial assets held by the company, soared 65% year over year (YOY) to hit $102 billion. This is the first time it breached the $100 million mark after 2021, so management expects a strong 2024.
With an improvement in the macroeconomic conditions and the stock market moving upward, we could see more users head to the Robinhood platform. Also, Bitcoin has hit a lifetime high, and this could attract users to the platform. And, HOOD benefits from the high interest rates. Therefore, the numbers are proof that the fintech company is in a healthy position right now.
On the date of publication, Vandita Jadeja 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 InvestorPlace.com Publishing Guidelines.