This is the best time to buy these 3 long-term Fintech stocks

For most of 2022, the fintech sector has underperformed the markets. The reasons are relatively simple: Quantitative policy tightening led by a hawkish Federal Reserve seeking to rein in inflation has dampened the general appetite for risk. This has led to a faster exit of investor capital from riskier than average sectors, including fintech. However, there are some long-term fintech stocks to buy

The faster-than-average exodus is evident in the dramatic declines in several fintech barometers. Global X Fintech ETF (NASDAQ:FINX) and Cathie Wood’s Ark Fintech Innovation ETF (NYSEARCA:ARKF) are down 49% and 62% respectively in 2022.

These results are much worse than the S&P 500 which has fallen around 23% in the same period.

On the one hand, it can be taken as a warning sign to avoid fintech altogether. On the other hand, fintech looks increasingly attractive and deeply depressed. For those who agree with the latter, now is a great time to buy these three long-term fintech stocks.

Bill.com (BILL)

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Bill.com (SNEEZE:BILL) is a cloud-based software company operating in the fintech space. The company supplies software aimed at small and medium-sized enterprises (SMBs) that automates financial processes. Essentially, it helps to increase efficiency by generating and streamlining invoices and approvals and thus speeding up the receipt of payments.

The numbers behind the fast-growing company are quite impressive. Bill.com posted earnings on August 18 led by revenue reaching $200.2 million, up 156% year over year.

The company provided guidance that it should see revenue in the range of $208 to $211 next quarter. But don’t be fooled by the relatively small sequential increase. These earnings represent a 77% increase at the midpoint. Bill.com also provided guidance that it expects revenue growth of 49% to 52% for the full fiscal year. The company may be slowing down a bit, but it’s also hitting the $1 billion revenue mark, so growth is to be expected.

The real problem is that Bill.com had a loss of $84.94 million in the quarter. So despite the rapid growth, rising interest rates will affect the ability to attract investor capital. For those playing the long game, BILL stock looks very solid.

Mastercard (MA)

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MasterCard (SNEEZE:MA) is a solid payment warehouse. The company expects US retail sales to be remarkably strong this holiday season with 7.1% growth. Retail spending rose 8.5% in 2021 as pent-up demand and higher savings underpinned an increase. So the expected 7.1% increase is particularly strong after a strong 2021 and in the face of rising inflation in 2022.

That should allay some fears among investors who were concerned that consumers might tighten their purse strings this holiday season. Instead, Mastercard expects more campaigns with a 7.1% increase in retail spending.

Mastercard has performed well in 2022. In the first half of 2022, sales increased by 23%, from $8.7 billion to $10.7 billion. Net income increased by an impressive 41% during the period, reaching $5.2 billion. In addition, credit card spending is up 13% compared to last year as inflation erodes today’s purchasing power. That bodes well for Mastercard and the fees it charges on these credit transactions. The depressed market gives savvy investors the opportunity to buy MA stocks cheap and stock a blue-chip fintech in their portfolio.

MercadoLibre (MELI)

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MercadoLibre (NASDAQ:MELI) has been described as Latin America’s answer to Amazon (NASDAQ:AMZN). The comparison is generally true since both firms operate e-commerce platforms that span large geographic areas. Both firms also have significant fintech arms.

MercadoLibre boasts 38.2 million unique and active fintech users in its Q2 letter to shareholders. The value of digital account total payments reached $9.4 billion in the second quarter. This figure represented growth of 167% on a USD basis. MercadoLibre’s growing fintech business aside, it’s a strong stock to consider overall. Revenue reached approximately $2.6 billion, which was a 52% year-over-year increase. Fintech revenue crossed the $1 billion mark for the first time ever, growing 113%.

MercadoLibre has a particularly strong presence in the important Latin American markets of Brazil, Argentina and Mexico and registered three-digit revenue growth in Brazil and Argentina in the 2nd quarter. MELI stock is particularly attractive based on a target price that suggests 57% upside and comes with strong “buy” ratings. All in all, it might not be too hyperbolic to suggest that MELI stock is the next Amazon.

At the date of publication, Alex Sirois 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 InvestorPlace.com Guidelines for publication.