3 fintech stocks to put on your watch list this fall and 1 to avoid


The fintech industry has grown significantly in recent years due to the accelerated digitization caused by the pandemic. The progressive digitization of companies and financial transactions should continue to drive growth in the industry. For example, investors could add promising fintech stocks Visa (V), AssetMark Financial (AMK) and Regional Management (RM) to their watch list. However, macroeconomic uncertainties are currently weighing on investor sentiment towards fintech stocks. Therefore, it might be prudent to avoid PayPal (PYPL) given its underlying weakness. Let’s discuss…


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Fintech companies have become increasingly popular in recent years due to their convenience in conducting financial transactions. The COVID-19 pandemic accelerated the adoption of fintech as it met ever-increasing consumer demand for ease of payment, money management, and access to easy credit.

The growth of the industry is driven by newer trends such as buy-now-pay-later (BNPL), neo-banking and platform-as-a-service (PaaS). According to a report by Vantage Market Research, the global fintech market is expected to grow by one CAGR of 19.8% to $332.50 billion by 2028.

However, fintech stocks have been under pressure since the beginning of the year due to the Fed’s restrictive monetary policy. With inflation rising more-than-expected in August, the central bank last week announced the third straight rate hike of 75 basis points.

The Fed has also announced more aggressive rate hikes in the coming months. This is likely to hurt investor confidence in fintech companies. The fall in fintech stocks from the premium valuations they achieved during the peak of the pandemic is linked to the ARK Fintech Innovation ETFs (ARKF) 60.4% year-to-date decline.

As such, we think it makes sense to trade away from fundamentally weak fintech stock PayPal Holdings, Inc. (PYPL). However, investors could reasonably add promising industry participants Visa Inc. (v), AssetMark Financial Holdings, Inc. (AMK) and Regional Management Corp. (rm) on their watch list to benefit from the long-term growth prospects of the industry.

Stocks to watch:

Visa Inc. (v)

V is a payments technology company that enables digital payments between consumers, merchants, financial institutions, corporations, strategic partners and government agencies. It operates VisaNet, a transaction processing network that enables the authorization, clearing and settlement of payment transactions. In addition, the company offers card products, platforms and value-added services.

On March 10, 2022, V announced that it had completed its acquisition of open banking platform Tink. Tink enables financial institutions, fintech and merchants to create financial products and services and move money.

Charlotte Hogg, CEO of Visa Europe, said: “Digital tools are powering the new economy and the combination of Visa and Tink will support greater choice and quality of digital money services as the boundaries between commerce, financial services and payments continue to converge.”

V’s net income increased 18.7% year over year to $7.28 billion for the third quarter ended June 30, 2022. The company’s non-GAAP net income increased 29% year over year to $4.20 billion. Non-GAAP EPS was $1.98, up 33% year over year. Also, operating income rose 2.1% year over year to $4.14 billion.

For the quarter ended September 30, 2022, V’s earnings per share and revenue are expected to increase 15.3% and 15.4% year over year, to $1.87 and $7.57 billion, respectively . It beat consensus EPS estimates in each of the last four quarters. Over the past three months, the stock is down 9.6% to close the last trading session at $179.18.

V POWR ratings reflect these promising prospects. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR ratings are calculated considering 118 different factors, with each factor being optimally weighted.

It has a B grade for stability and quality. It ranks 9th within the same industry. To see the other assessments of Growth, Value, Momentum and Sentiment, click here.

AssetMark Financial Holdings, Inc. (AMK)

AMK provides wealth management and technology solutions throughout the United States. It provides the financial advisor channel with an open architecture product platform, customer service, asset allocation options, practice management, support services and technology.

AMK’s total revenue increased 18.1% year over year to $151.20 million for the second quarter ended June 30, 2022. The company’s Adjusted EBITDA increased 24% year over year to $49.63 million. Also, adjusted net income increased 22.1% year over year to $32.42 million. Additionally, adjusted earnings per share were $0.44, up 22.2% year over year.

Analysts expect AMK’s earnings per share and sales for the quarter ended September 30, 2022 to increase 5.5% and 10.2% year-on-year, to $0.42 and $111.76 million, respectively. It beat Street EPS estimates in three of the last four quarters. Over the past three months, the stock is down 4.5% to close the last trading session at $18.64.

AMK’s POWR ratings reflect this solid outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.

It has a B grade for Growth, Stability, and Mood. Again, it ranks 6th in the same industry. click here to see AMK’s other ratings for value, momentum and quality.

Regional Management Corp. (rm)

RM, a diversified consumer finance company, offers customers in the United States a wide range of personal loan products. They have limited access to consumer credit from banks, savings companies, credit card companies, and other lenders. It offers small and large installment loans, as well as retail loans to help purchase furniture, appliances, and other retail items.

In June, RM announced the expansion of its operations in Indiana, its 15th year, with the dedication of its first office in Merrillvilleth US state. The new position strengthens RM’s de novo position in the Midwestern United States. Robert W. Beck, President and CEO of RM, said, “We are very excited to bring our range of affordable financial solutions for hard-working Hoosiers to Indiana.”

For the second fiscal quarter ended June 30, 2022, RM revenue increased 23.3% year over year to $122.87 million. The company’s total assets increased 29.9% year over year to $1.54 billion.

Analysts expect RM’s revenue to increase 22% year-on-year to $125.97 million for the quarter ended September 30, 2022. It beat Street EPS estimates in each of the last four quarters. Over the past month, the stock is down 20.9% to close the last trading session at $29.06.

RM’s POWR ratings reflect these promising prospects. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.

It’s rated A for value and B for quality. It ranks first in the consumer financial services industry. To see RM’s additional assessments for Growth, Momentum, Stability and Sentiment, click here.

Stocks to avoid:

PayPal Holdings, Inc. (PYPL)

PYPL is a digital payments company that enables digital payments on behalf of consumers and merchants. Its combined payment solutions include its payment platform, including PayPal, PayPal Credit, Braintree, Venmo, Xoom, iZettle, and Hyperwallet products and services.

PYPLs operating margin was 19.1% for the second quarter ended June 30, 2022, compared to 26.5% for the same period last year. The company’s non-GAAP net income declined 21% year over year to $1.08 billion. Non-GAAP EPS was $0.93, down 19% year over year.

Analysts expect PYPL’s earnings per share to decrease 14.4% year-on-year to $0.95 for the quarter ended September 30, 2022. Over the past year, the stock is down 65.2% to close the last trading session at $91.12.

PYPL’s weak fundamentals are reflected in its POWR ratings. The stock has an overall rating of D, which equates to a Sell in our proprietary rating system.

It is ranked 41st out of 50 D-rated stocks financial services for consumers Industry. click here to see more of PYPL’s component varieties.


V shares traded at $179.36 per share on Thursday morning, up $0.18 (+0.10%). Year-to-date, V is down -16.80% versus a -23.08% gain for the benchmark S&P 500 index over the same period.


About the author: Dipanjan Banchur

Ever since he was in elementary school, Dipanjan was interested in the stock market. This led to a master’s degree in finance and accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a keen interest in reading and analyzing emerging trends in the financial markets.

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