The 3 Most Promising Fintech Stocks to Buy for May 2023

In recent months, fintech stocks have experienced a bumpy ride. Despite these setbacks, the global financial infrastructure’s digital transformation should continue to attract growth-oriented investors searching for the best fintech stocks.

The industry’s pioneers are capitalizing on the growing momentum by offering innovative services to both individuals and businesses.

Global Fintech ETF (NASDAQ:FINX) 6-month return is negative 3.4% compared to the S&P 500’s 7% return. The median return for all ETFs is 6% over the same period.

The decline in fintech growth stocks provides an opportunity to load up on more fintech stocks at a discount.

As we delve into these top prospects, it’s important to understand that the future of finance is digital. Therefore, savvy investors will want to take advantage of the current scenario to secure future gains.

Toast (TOAST)

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Toast (SNEEZE:TOAST) has established its unique presence in the restaurant technology arena. It has been running a high-growth business, with over 50% revenue growth, while rapidly moving towards breaking even in the not-so-distant future.

Last year, it effectively reduced its losses, improving its EBITDA margin from negative 26.8% to negative 9.7%. Much of that is its relentless top-line performance resulting from effective expansion strategies.

Toast works with 200 companies and added 23,000 net new locations last year. Analysts predict the firm will continue to grow at 40% going forward.

The subscription module portfolio continues to expand rapidly, supported by a solid net retention rate of 128%.

PayPal (PYPL)

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PayPal (NASDAQ:PYPL) is a typical fintech pioneer that evolves effectively with the times. In the last quarter of 2022, it boasted 435 million active users who performed over 6 billion transactions.

PYPL is often overlooked in favor of newer alternatives, but its resilience and adaptability make it as relevant as ever in fintech.

Admittedly, PYPL stock is down over 70% since its 2021 peak, impacted by the post-pandemic drop in online payments and inflationary pressures.

The platform continues to march forward, having processed a whopping $1.4 trillion in total payments, up 9% year-over-year by 2022. Its active account base rose an impressive 43% before 2019.

Revenue rose 10% last year, with analysts predicting a commendable 7% growth this year, followed by an acceleration of over 9% in the following year.

Therefore, as the fintech landscape continues to evolve, PYPL remains one of the best bets in the sector.

Visa (V)

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Visa (SNEEZE:V) has expanded its services beyond traditional credit cards to adapt to the rapidly developing fintech sphere.

Performance has picked up steadily post-pandemic, with consumer spending on travel contributing hugely to this resurgence.

Top and bottom line results are well in the green, with Visa recently beating estimates on both lines again in the first quarter. Revenue was $7.9 billion, significantly higher than the estimate of $7.7 billion.

On top of that, its EPS of $2.18, about 8.5% than analyst estimates. The stellar results can be attributed to the resurgence of global travel, which effectively led to a 24% year-on-year increase in Visa credit card cross-border volume.

Investing in Visa comes with a dividend, and an attractive one at that, which has increased for 14 consecutive years.

At the date of publication, Muslim Farooque 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 author, subject to the InvestorPlace.com Publishing Guidelines