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Financial technology, or fintech, is a broad category of companies that use technology to improve or automate financial services. Companies that develop new digital payment-processing solutions are considered fintech, as are companies that build and operate person-to-person payment applications.
Many fintech stocks were hit hard in 2022 with the stock market downturn; however, 2023 has started off strong for the sector, and analysts and investors are taking notice. On January 20th, shares of Block, Inc. (NYSE:SQ) jumped over seven percent after Truist increased its price target for the digital payments company from $85 per share to $105 per share. Truist analyst Andrew Jeffrey lifted the price target as a part of broader research coverage on fintech stocks.
The fintech market was valued at USD 112.5 billion in 2021, and the sector is predicted to grow at a CAGR of 19.8% to USD 332.5 billion by the year 2028.
With plenty of room to grow, there’s a ton of long-term potential in the fintech industry, so it can be an opportune time to look for solid companies to hold for the long term.
Here are four fintech companies every investor should keep an eye on: AppTech Payments Corp. (NASDAQ: APCX), Block, Inc. (NYSE: SQ), PayPal (NASDAQ: PYPL), and Sofi Technologies Inc. (NASDAQ: SOFI).
AppTech Payments Corp. (NASDAQ: APCX) is an innovative fintech company whose mission is to deliver a better way for businesses to provide their customers with customizable, immersive commerce experiences.
AppTech’s all-new, patent-backed fintech platform, known as Commerse, is powering their "Commerce Experiences-as-a-Service," designed to fundamentally change the way digital banking, mobile payments, and merchant services are facilitated.
Commerse provides digital banking, text-to-pay, crypto payments, and merchant services altogether from a single, unified platform that drives operational efficiencies and growth for businesses while providing the economic convenience that their customers demand from today’s commerce experiences.
The platform incorporates Payments as a Service, Banking as a Service, data, AI/ML, MarTech, and other features to create flexible, rich, and personalized payment and banking experiences for their end users.
Commerse provides seamless digital banking and digital payment acceptance, including credit card issuance of physical and virtual cards from credit card and alternative payment processing services such as text-to-pay, to cross-border payment capabilities, all housed within a single ecosystem.
AppTech’s Commerse fintech platform is making waves and getting noticed. APCX received a shout out from Slatestone Wealth Chief Market Strategist Kenny Polari on Fox Business, regarding the stock's potential in the 2023 year.
One of the key features found in the Commerse platform is the ability to "text-to-pay." Digital payments are quickly displacing other payment methods; in 2020, digital payments overtook cash as the top transaction method for offline commerce and accounted for about 50% of global online commerce volume in 2021.
APCX is revolutionizing the industry with its ground-breaking, patented ‘Text-to-Pay’ technology for contactless transactions. Customers of AppTech have access to pre-built, API-driven features that make it simple to create and send invoices via text message and let customers make payments via text message, the most popular method of digital communication.
APCX’s upward trajectory doesn't stop there, in fact—the company currently owns 17 different patents. In a recent interview, Luke D'Angelo, Executive Chairman, CEO & Chief Investment Officer at APCX, commented on their patents, stating: “First and foremost, our intellectual property is bar none. Obviously, big companies have good patent portfolios, but the key to intellectual property and patents is being first. I can say that we have been first on a lot of fronts. We wanted to make sure that when we came to market that we're not looking back. We're not looking to the left or right, we're just charging straight forward. Our due diligence and study of the fintech market for the last seven years is paramount."
The company has a strong portfolio of intellectual property, ground breaking technology with all time high adoption rates, and a comprehensive platform that enables small businesses. Put APCX on your radar for stocks to keep an eye on in 2023.
Block, Inc. (NYSE: SQ) is a global technology company with a focus on financial services. Made up of Square, Cash App, Spiral, TIDAL, and TBD, Block builds tools to help more people access the economy.
One of Block's successes, Cash App, enables users to send, spend, or invest money in Bitcoin or stocks with ease. Spiral creates and funds open-source Bitcoin projects that are free to use. TIDAL is used by artists to help them succeed as entrepreneurs and connect with their fans more deeply. TBD is creating an open developer platform to make it easier to gain access to Bitcoin and other blockchain technologies without going through a financial institution.
Recently, Truist analyst Andrew Jeffret adjusted his price target for the digital payments company from $85 per share to $105 per share. As part of broader research coverage on fintech stocks, the Truist analyst raised the price target.
With the stock already performing well in 2023, it is one to keep an eye on.
PayPal Holdings, Inc. (NASDAQ: PYPL) is a pioneer in the fintech space, and with 432 million active accounts, it's also one of the biggest players. PYPL operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide.
In a conference call to discuss financial results for the third quarter of 2022, PayPal Chief Financial Officer Gabrielle Rabinovitch discussed the company's plans for 2023, stating, "Returning capital to our shareholders continues to be our single biggest priority from a capital allocation standpoint, and I think it will continue to be."
Even though PayPal isn't the high-growth opportunity it once was, with only 7% year-over-year revenue growth anticipated for the current quarter, it is still possible for PayPal to increase revenue per share by a double-digit percentage, which should be sufficient to outperform the market in 2023 and beyond.
SoFi Technologies Inc. (NASDAQ: SOFI) operates through three segments: lending, technology platforms, and financial services.
SoFi's lending and financial services and products allow its members to borrow, save, spend, invest, and protect their money. It offers student loans, personal loans for debt consolidation and home improvement projects, and home loans. The company also provides cash management, investment, and technology services.
While 2022 was not the strongest year for the stock, the past month has proven to be different, with shares of the company having gained 27.33% over the time period.
It is also worth noting the recent changes in analyst estimates for SoFi Technologies, Inc. These most recent changes typically reflect how quickly short-term business trends change. Because of this, we can view favorable estimate revisions as a sign that the company's business outlook is improving.
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