13 Best Fintech Stocks to Buy at a Discount

Fahad Saleem
Updated 11 min read

In This Article:

In this article, we will take a look at the 13 best fintech stocks to buy at a discount. To see more such companies, go directly to 5 Best Fintech Stocks to Buy at a Discount.

It seems nothing is going in the favor of the fintech sector since 2022, when things started to take a horrible turn for the industry that is highly vulnerable to high interest rates and economic volatility. The fintech sector was teeming with highly overvalued firms making big claims about their products and services. These companies had heavy debt loads and weak fundamentals. When easy money started to evaporate in 2022, so did their stock prices. The Global X Fintech ETF fell a whopping 52% in 2022, much higher than the losses recorded by the financial and tech sectors separately.

Major fintech firms were just not ready to face the harsh realities that changed the industry dynamics as the pandemic-induced trends started to recede. For example, companies like PayPal and Shopify, emboldened by the rising trend of online shopping, assumed the high growth trajectory of online shopping was here to stay. When in-store shopping made a comeback, these companies had to make painful adjustments. Another shock to these companies came after the retreat of retail investors. As tech stocks and the broader market started to collapse, retail investor activity slowed down, hurting companies like Robinhood, which had hired thousands of employees to keep up with the growth that came after the meme stock mania seen during the pandemic days. Eventually, Robinhood had to announce a 23% cut in its workforce.

Another blow to the fintech sector came amid the collapse of the Silicon Valley Bank.

However, this broader downturn in the fintech industry is exactly what makes certain stocks in the sector worthy of attention these days since they are currently trading at a discount and could rebound sharply once the economy begins to turn the corner.

An Opportunity in the Fintech Space

BMO Capital Markets Chief Investment Strategist Brian Belski recently said in a note that the selloff in the financials sector is overdone and based on unfounded fears.

"From our perspective, we believe these banking crisis and systemic risk fears are misguided as the recent bank failures were idiosyncratic in nature and ultimately self-inflicted by business mismanagement," Belski thinks.

The analyst thinks the financial system is "quite stable.” He thinks that the sharp decline in the S&P 500 Financial is a “buying opportunity for investors, particularly given the attractive valuations, dividend attributes, and high quality tilt that continues to underpin the sector."

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