7 Fintech Stocks to Buy for Royal Returns

In 2021, companies within the fintech sector collected well over 120 billion dollars. About $1 out of every $5 in venture capital funding went to a fintech startup. It is clear that many large investors were excited about fintech firms. For those who also want to get on this bandwagon, I want to present seven fintech stocks to buy for royal returns.

However, macroeconomic challenges and a looming recession have limited fintech stocks through the first nine months of 2022. Specifically, the KBW Nasdaq Financial Technology Index has lost 27.5% so far this year. In comparison S&P 500 the index has fallen 18.7%.

Still, the sharp decline in fintech stocks has made the valuations of many of these names more attractive, creating compelling buying opportunities for growth investors. Moreover, the long-term prospects of the fintech space still appear to be attractive. That’s because of the continued rise of e-commerce and the growing use of mobile payments.

With that said, here are the seven fintech stocks that can generate long-term returns.

Bill.com (BILL)

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Payment processing platform Bill.com (NYSE:BILL) offers cloud-based financial solutions for small and medium-sized businesses. The software platform uses artificial intelligence (AI) to streamline complex back office financial operations.

Bill.com posted strong fiscal fourth-quarter and full-year results on August 18 rRevenue increased 156% year over year to $200.2 million. Investors were also pleased with the significant decline in loss per share on a year-on-year basis, excluding some items, and the meaningful growth in total payment volume.

Meanwhile, Bill.com is focused on growing its business, as it acquired the accounts receivable provider. Invoice2go and the budgeting and cost management tool Divvy. For fiscal year 2023, Bill.com expects revenue to increase by around 50%, an increase that investors will view favorably.

The BILL share has fallen 43% in 2022. The shares trade for 23.6 times the company’s sales. Analysts’ 12-month median price target for Bill.com stock is $220.

Fiserv (FISV)

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Payment processing company Fiserv (NASDAQ:FISV) markets its Clover payment processing hardware, while the software enables small businesses to accept credit cards in their stores.

Within the data processing services segment, Fiserv’s market share is over 7.7%. By way of comparison, the respective market shares on Bank of America (SNEEZE:BAC) and Citigroup (SNEEZE:C) is approx. 41.5% and 33.5%.

Fiserv announced its financial results for the second quarter on July 26. Revenue increased 10% year over year to $4.45 billion. In 2022, Fiserv expects that revenues will continue to increase by upper single-digit percentages.

The FISV share is currently down 1.8% this year. The shares trade at 14 times Fiserv’s forward earnings and four times sales. Analysts’ 12-month median price forecast for Fiserv stock is $127. Given the volatility of tech stocks these days, FISV shares could fall below $100 in the near term, creating a better entry point for investors.

Global X FinTech ETF (FINX)

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Next on our list is an exchange-traded fund. Specifically, there is the Global X FinTech ETF (NASDAQ:FINX). The ETF offers broad exposure to global fintech companies and focuses on mobile payments, lending, blockchain, cryptocurrencies, financial software, crowdfunding and enterprise software solutions. The fund started trading in September 2016.

FINX currently owns 67 assets. The top ten holdings account for more than half of the net worth of $568 million. Over 80% of the shares it owns are in the information technology sector.

Among the leading stocks it owns are Paypal, FiservBlocks (NASDAQ:SQ), Intuit and the Netherlands-based mobile payment specialist Adyen (OTCMKTS:ADYEY).

So far in 2022, FINX has fallen 44%, hitting a 52-week low in mid-June. Due to the sale of fintech stocks, many stocks owned by FINX are currently trading at lower values ​​than last year.

The ETF’s trailing price-earnings and price-book ratios are 34.18 times and 2.77 times, respectively.

Intuit (INTU)

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Intuit (NASDAQ:INTU) offers financial management and compliance products and services, it is known for TurboTax and QuickBooks. The company has a market value of around $120 billion, and most of its users live in the US and Canada.

The provider of financial management platform reported on 23 August calculations for the 4th quarter and full year. Although revenue fell 6% YOY to $2.4 billion, investors were pleased with the increase in the company’s long-term revenue guidance for its key Small Business unit.

Intuit has made some important acquisitions in recent years, paving the way for rapid top-line growth. The Credit Karma and MailChimp transactions have led to significant synergies within the small business ecosystem.

Although a recession may be looming, Wall Street expects the cross-selling strategy to boost the value of INTU shares in the coming quarters.

INTU shares have lost 35% so far this year. The shares trade at 30.8 times Intuit’s forward earnings and 9.4 times book value. Analysts’ 12-month median price forecast for Intuit is $550.

Mercado Libre (MELI)

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Latin American e-commerce giant Mercado Libre (NASDAQ:MELI) has a network of over 130 million active buyers and 1 million sellers. Meanwhile, fintech platform Mercado Pago is currently among the most popular digital wallets in the region. The company also operates a logistics service and a business lending platform.

Recent research suggests that the fintech sector is growing rapidly in Latin America and the Caribbean. Boosted by rising income levels and digitization trends. e-commerce is also growing significantly in Latin America.

Mercado Libre published its Q2 results on 3 August. The company’s revenue increased 57% year over year to $2.6 billion. Investors were delighted that the firm’s MercadoPago payments business has become a key growth driver for the company, as total payment volume rose to $30.2 billion.

So far in 2022, MELI shares have fallen 33%. However, it is currently in recovery mode as it has increased by more than 50% in the last three months. The shares trade at 81.3 times MELI’s forward earnings and only 5.2 times sales.

Wall Street’s 12-month median price forecast for the stock is $1,300.

PayPal (PYPL)

PayPal’s (NASDAQ:PYPL) platform facilitates payments for global consumers and merchants. Among the offers are the PayPal platform as well as Venmo and Braintree. Recent calculations suggest that PayPa’s market share in the global payment technology segment is over 41%.

The mobile payments company published its results for the second quarter on 2 August. Although revenue grew to $6.8 billion, EPS fell. Wall Street was closely watching the ambitious cost-cutting measures that the company plans to implement in FY22 and FY23. Investors would also like to see PayPal enter new markets by taking steps such as expanding its Buy Now Pay Later (“BNPL”) payment option.

PYPL shares have lost more than half their value since January. The shares trade at 19.7 times forward earnings and 4.2 times sales. Analysts’ 12-month median price forecast for PYPL stock is $120.

UiPath (PATH)

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Our latest fintech stock is a software maker UiPath (NYSE:PATH). It focuses on robotic process automation (RPA), also known as bots, which can help streamline business operations. In other words, users depend on UiPath’s software to eliminate repetitive tasks and increase the productivity of their employees.

The RPA specialist announced its Q2 financial results on September 6. Although revenue rose 24% YOY to $242.2 million, UiPath reported a loss per share, excluding certain items, of 2 cents. However, Wall Street was pleased that UiPath’s existing customers increased spending by double-digit percentage levels, while gross margins remain strong.

PATH bulls believe their software has an important role to play as production becomes increasingly automated and factories become smarter. Recently, UiPath has been recognized as one of the leaders in the RPA space. Its leading competitors include SS&C technologies (NASDAQ:SSNC), Automation anywhere and Microsoft (NASDAQ:MSFT).

PATH stock has crashed 68% so far in 2022. As a result, shares are trading at a modest value of just 7.6 times sales. Meanwhile, analysts’ 12-month median price forecast for Uipath is $18.25.

At the date of publication, Tezcan Gecgil, Ph.D. (neither directly nor 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.