The 7 Most Promising Fintech Stocks to Buy for April 2023

As a hotbed of innovation, top fintech stocks to buy have disrupted traditional financial services. They have delivered ground-breaking solutions that strengthen efficiency and availability. In addition, the oversold fintech players tap into burgeoning markets, such as microfinance and “buy now, pay later” services, and address the underserved. With this innovative potential comes the promise of exceptional long-term growth. And all of this can make fintech a tempting sector for investors with a high risk appetite.

Although 2022 proved to be a challenging year for fintech stocks to buy, 2023 offers a more optimistic outlook. The technology-heavy Nasdaq-100 has ticked upwards since the beginning of the year, pointing to a more favorable market for relatively risky shares. That said, let’s dive into the most promising fintech stocks to buy for April.

Fintech Stocks to Buy: PayPal (PYPL)

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PayPal (NASDAQ:PYPL) is a fintech pioneer, with a huge user base of 435 million. Its user base has grown by over 100% from 2017 to 2022, a testament to its superior brand equity and its penchant for innovation. It continues to push the envelope in the fintech space with a range of new features and services that have resulted in over 3,000% growth in its revenue base from 2013 to last year.

2022 was a tough year for most businesses, which gave way to efficient belt tensioners. In that department, PayPal’s management has done a remarkable job of limiting operating expense growth to 2.7% over the past year.

PayPal’s potential for a robust recovery is clear in line with the economic feedback. Also, another key growth catalyst for the platform is its mobile app users, who typically engage in 60% more transactions per user. PayPal has huge potential for growth with its mobile platform, with roughly 200 million accounts yet to adopt the app.

Visa (V)

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Credit card giant Visa (SNEEZE:V) remains a titan in the realm of financial transactions. It boasts an unshakable foundation, with spellbinding fundamentals, characterized by 50%+ net, EBITDA and gross profit margins.

The pandemic saw Visa’s revenue and earnings rise to record highs following the surge in contactless and e-commerce transactions. But with the pandemic tailwind abating, the resurgence in travel and tourism has unlocked new opportunities for Visa. Cross-border payments for the firm have grown by significant margins, which has cushioned the effects of a recession shock on the macro economy.

The firm’s dedication to innovation and research has propelled it towards financial prowess. Delving into cutting-edge technologies such as artificial intelligence, cryptography and blockchain, Visa’s research arm masterfully tackles the challenges of the fintech landscape. From a shareholder perspective, the V share boasts 14 years of consecutive growth in payouts, while being modestly undervalued, according to GuruFocus.

Fair Isaac Corp. (FICO)

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Fair Isaac Corp. (SNEEZE:FICO), known for its eponymous credit score, is a world leader in analytics software and tools. Catering to industries as diverse as banking, insurance and healthcare, FICO provides companies with cutting edge credit risk assessment, fraud detection and decision making solutions.

It runs a consistent business with an A-rated profitability profile and robust single-digit revenue growth over the past five years. The company has recently diversified its revenue base to expand into analytics, professional services and digital decision making. The fruit of the effort is proven in the latest results, where the software annual recurring revenue (SCAR) was up 11%, while operating income rose by only 5%.

Furthermore, it may have an important role in the AI ​​sphere with its recent State of Responsible AI in Financial Services report highlighting the growing demand for AI in the financial sector. Given the gaps in enterprise-specific AI policies, it can make a ton of money in the niche with the software suite.

Toast (TOAST)

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Fintech player Toast (SNEEZE:TOAST) is transforming the game for restaurants of all sizes by automating critical processes. Although it has a modest market cap compared to other companies on the list, the growth potential is sky-high when it comes to profitability. By fiscal 2024, analysts expect the loss per share to narrow to just four cents, a 92.6% improvement from 2022.

Toast’s all-in-one software platform powers a remarkable 74,000 restaurants across the US and is just beginning to tap into a colossal market of over a million locations. The company’s impressive ARR shot from $326 million in 2020 to a whopping $901 million last year. Also, its net retention rate, a key metric for assessing the annual revenue generated from its loyal customer base seconds, rose from 121% in 2020 to 128% at year-end. As Toast continues to expand its offerings, it is undoubtedly a fintech force to watch for a long time.

Intuit (INTU)

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Intuit (NASDAQ:INTU) has established its position as a giant in the financial management and compliance area, and serves a customer base of 100 million globally. The popular solutions, such as QuickBooks and TurboTax, have become ubiquitous over time. Also, it continues to add new services to its software suites, most recently adding live versions of its TurboTax and QuickBooks offerings. In addition, it introduced live services to help TurboTax’s Spanish-speaking clientele. That allows the firm to gain more traction with Latin American small business owners, who are growing significantly faster than their non-Hispanic counterparts.

The company has had an impressive track record of increasing sales and earnings in recent years. For example, gross margins have averaged 82% over the past five years, while revenue growth has been above 20%. It’s a small business, and the self-employed segment remains the most lucrative, accounting for more than 60% of total revenue and growing at double-digit margins. With projected revenue growth of 19-20% for fiscal 2023, the segment is poised to increase Intuit’s overall sales by 8% to 9%.

Block (SQ)

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Block (SNEEZE:SQ) has had a turbulent year, with the share down over 60% last year. Moreover, the exposure to Bitcoin (BTC-USD) and other macro headwinds weighed on top and bottom results. Nonetheless, the strong showing over the last couple of quarters, Bitcoin’s resurgence and the slowdown in interest rate hikes point to an incredibly bright outlook.

Block has since evolved into a formidable force in the fintech space since rolling out its card reader service on Square. It later added the widely popular Cash app in 2013 and began exploring innovative ways that effectively bridge the two ecosystems.

Enter the acquisition of Afterpay last February, which had the dual effect of adding a new “buy now, pay later” feature for Square merchants while giving cash users more control. This effort is part of CEO Jack Dorsey’s vision to create an “ecosystem of ecosystems” that continues to grow the firm’s multibillion-dollar addressable market.

MercadoLibre (MELI)

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MercadoLibre (NASDAQ:MELI), is affectionately called the “Amazon of Latin America,” and boasts an eye-watering annual sales volume of over $30 billion. However, it is fintech marvel Mercado Pago that drives the growth story forward. In the fourth quarter, the fintech arm posted revenue growth of $1.3 billion, a 74% improvement in US dollars. Also, total payment volume increased by over 45% to $36 billion.

In addition, its impressive performance is bolstered by a 65% rise in the company’s loan portfolio to $2.8 billion during the quarter. Consequently, the firm swung to a quarterly profit, driven by the spectacular performance of its fintech unit.

Mercado Pago expands its target customers beyond those who have an existing e-commerce affiliation with MercadoLibre. The aim is to further expand the total addressable market and leverage the expertise in the e-commerce space to expand the fintech base.

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.