What Does 2022 Hold For Fintech Stocks?

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our subject fintech stocks — which includes digital payments and lending players, card networks and insurance technology players — had a tough 2021, falling nearly 11% during the year compared to the S&P 500, which was up nearly 27%. Now concerning us companies have actually seen pretty solid demand growth through 2021, driven by growth in e-commerce spending, an accelerated shift from cash to digital payments, and growing interest in cryptocurrencies and digital wallets. For perspective, the average revenue growth for the companies in our subject was approximately 32% for the past twelve months, with operating margins also running slightly higher. However, investors took a slightly cautious stance on high-growth, highly valued stocks amid the prospect of several interest rate hikes by the US Federal Reserve in 2022, and it is likely that fintech names are weighing in considering they are above-market multiples. do business on. within our subject, master card Its stock was the strongest performer over the past 12 months, rising nearly 4.5%. On the other hand, category Its stock has been the worst performer in the past 12 months, down nearly 36%.

So what is the outlook for the subject? Given the total size of the banking, lending, trading, investment and insurance industries, the opportunity for fintech companies is enormous. Unlike the traditional financial services industry, which incurs high costs related to branching, staffing, customer acquisition and regulatory overhead, fintech players largely operate virtually, giving companies with asset-light models the scope to increase margins. If they build scale. That being said, the trajectory for fintech stock prices in 2022 is difficult to predict, given the rising interest rate environment and the possibility that investors may continue to limit exposure to pandemic winners.

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Below you’ll find our previous coverage of the fintech theme where you can track our outlook over time.

[11/18/2021] Fisher, PayPal, Square: Fintech stocks remain depressed. should you buy

our subject fintech stocks — which includes digital payments and lending players, card networks and insurance technology players — is down about 1% year-over-year on an evenly weighted basis compared to the broader S&P 500, which is down about 25% over the same period. Increased. , There are likely a few factors driving the recent poor performance. First, these stocks saw a huge rally through 2020, rising nearly 80% year over year, and it’s likely that investors are booking some gains this year and the COVID-19 reopening. Moving in value and cyclical stocks. In addition, some companies in our area are also being weighed down by the possibility that e-commerce sales growth during the holidays could be muted due to supply chain issues and shortages, and with the rapid exit of customers. There may be higher in-store sales.

That said, we believe that the theme benefits from a secular shift from physical payments to digital and contactless payments, the adoption of e-commerce, and improvements in financial inclusion in the US and abroad. square stock Our theme has been the strongest performer, growing about 10% year over year. Square is emerging as a big payment player, with the addition of Cash App, which allows users to send and receive money, and Square point-of-sale, which enables merchants to process payments via smartphones. make capable. On the other hand, fisher stock It has been the weakest performer, with a decline of nearly 1% year-on-year. The company provides fintech solutions for banks, thrift, credit unions, securities broker-dealers, leasing and finance companies, and retailers.

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[9/24/2021] Fintech stocks are lagging the market. time to buy?

our subject fintech stocks — which includes digital payments and lending players, card networks and insurance technology players — is down about 1% year-over-year on an evenly weighted basis compared to the broader S&P 500, which saw a 19% gain over the same period. developed. While the bulk of Theme’s underperformance was driven by single stock, insurance tech player Lemonade, which is down 44% year-on-year due to a mixed quarterly report after its 2020 IPO, even as other names like That Visa
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And fiserv also performed poorly. However, we believe this theme will benefit from a number of trends over the long term, including the transition from physical payments to digital and contactless payments, the adoption of e-commerce, and improving financial inclusion in the US and abroad. Below are some of the most recent developments for some of our stocks.

paypal Year-on-year increase of about 19%. Earlier this week, the company gave its app a major facelift by adding savings accounts and new in-app shopping tools as it looks to move beyond its core payments domain to become a financial super app.

Visa There has been a return of only 4.4% compared to this year, as the company has seen a reduction in cross-border volumes and a decline in consumer spending due to COVID-19. However, things seem to be improving with immunization rates and Covid-19 cases coming down slightly in recent weeks.

Green Point, A fintech company best known for its prepaid cards and banking services has seen its stock fall 9.3% year-over-year as the stock corrected slightly after its big rally through 2020 . However, business with the company continues to perform well. This year’s quarterly earnings have been consistently beating expectations.

[8/4/2021] Square-Afterpay deal puts fintech stocks back in focus

our subject fintech stocks — which includes digital payments and lending players, card networks and insurance technology players — is down about 1% year-over-year compared to the broader S&P 500, which gained 17% year-over-year. The underperformance comes as investors turn technology and high-growth names into cyclical stocks to reopen after the Covid-19 lockdown. However, the topic should come under the spotlight again after the fintech major of square It was recently announced that it would buy Afterpay, now an Australian buyout, later paying the company $29 billion, in all stock transactions. The deal is significant for Square (and for the wider fintech space), as it brings merchant solutions along with Square’s popular consumer applications and a financing component, as it seeks to take on banks and credit card companies for a larger share of the payments market. wants. , The deal also comes at a time when younger customers are moving away from traditional loans, with an increasing share of “pay later” products.

within us Fintech Stocks Theme, Square has been the strongest performer, with its stock up about 23% year-over-year. On the other hand, lemonade, An insurance technology player, this year has been the worst performer with its stock down 30%.

[7/13/2021] Square, Lemonade, Fisher: Fintech stocks are underperforming. time to buy?

our subject fintech stocks This includes digital payments and lending players, card networks and insurance technology players that could potentially disrupt the more than $1.5 trillion US insurance and financial services industry. These companies are likely to be huge beneficiaries of the need to move from physical payments to digital payments, increased adoption of e-commerce, and improved financial inclusion in the US and abroad. For perspective, about 25% of American households are either unbanked or underbanked according to the FDIC, and technology can help bridge the divide. Fintech business also has the potential to be very lucrative. Unlike the traditional financial industry, which incurs high costs related to branching, staffing, customer acquisition and regulatory overhead, fintech players largely operate virtually, with asset-light models giving them greater scope to improve margins. Is. Despite the opportunities, Theme has underperformed this year, with a nearly 2% year-over-year return compared to the S&P 500, which has remained up about 16% over the same period. Below are some of the stocks in our theme and a little more about their performance.

paypal One of the largest digital payment players. The stock has been the strongest performer within our theme, returning 29% year-over-year, driven by its Venmo peer-to-peer payments app, which gained traction on COVID-19. The company’s move to enable customers to buy and sell the popular cryptocurrency bitcoin on its platform has also clearly helped the stock.

category, another major digital payments player, has seen its stock rise nearly 12% year-over-year, as its Square Cash app — which was best known for peer-to-peer payments, banking and Continues to advance in investment-related services. Like PayPal, the company is also betting big on the crypto space.

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Visa The largest global electronic payment solutions company. The stock has underperformed this year, rising nearly 9% year-on-year, as cross-border transaction volumes plummeted as a result of the Covid-19 related travel slowdown. However, with the reopening of the economy, the company is seeing an uptick in consumer spending levels and this should be a good sign for the stock.

fiserv is a company that provides fintech solutions for banks, thrift, credit unions, securities broker-dealers, leasing and finance companies, and …

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