Fintech has brought revolutionary change to the way the financial industry operates. Since the onset of the COVID-19 pandemic, the fintech industry has played an instrumental role in enabling the world to adapt to rapid ongoing digitization.
The innovations delivered by fintech companies have helped lower the cost of financial services, allowing consumers to conduct financial transactions remotely. According to a Kenneth Research report, the global fintech market is expected to reach $305.70 billion by 2023, growing at a 22.2% CAGR.
Given this backdrop, we think it could be wise to scoop up quality fintech stocks Intuit Inc. (INTU), FactSet Research Systems Inc. (FDS), and OneMain Holdings, Inc. (OMF). They are currently trading much below their 52-week highs but have significant growth potential.
Intuit Inc. (INTU)
INTU provides financial management and compliance products and services. The Mountain View, Calif.-based company operates through three segments: small business & self-employed; consumer; and strategic partner. In addition, it provides TurboTax, QuickBooks, Mint, Credit Karma, and Mailchimp.
On Nov. 1, 2021, INTU announced the acquisition of Mailchimp, which provides a customer engagement and marketing platform for growing small- and mid-market businesses. INTU and Mailchimp are expected to work together to help tackle the challenges faced by small- and mid-market companies.
INTU’s non-GAAP revenue for its fiscal first quarter, ended Oct. 31, 2021, increased 51.7% year-over-year to $2 billion. The company’s non-GAAP operating income increased 66% year-over-year to $555 million, while its non-GAAP EPS came in at $1.53, up 63% year-over-year. Its revenue and EPS have increased at CAGRs of 18.9% and 13.5%, respectively, over the past three years.
Analysts expect INTU’s EPS for the quarter ending Jan. 31, 2022, to increase 177.9% year-over-year to $1.89. Its revenue for its fiscal 2022 is expected to increase 27.4% year-over-year to $12.27 billion. Over the past year, the stock has gained 55.4% in price to close yesterday’s trading session at $578.72. It is currently trading 19.2% below its 52-week high of $716.86, which it hit on Nov. 19, 2021.
INTU’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
It has an A grade for Sentiment and Quality and a B grade for Growth. It is ranked #20 of167 stocks in the Software – Application industry. Click here to see the other ratings of INTU for Value, Momentum, and Stability.
FactSet Research Systems Inc. (FDS)
FDS in Norwalk, Conn., provides integrated financial information, analytical applications, and services to the investment and corporate communities. The company delivers information through its four workflow solutions: Research, Analytics and Trading; Content and Technology Solutions; and Wealth. It provides insights into global market trends and intelligence on companies and industries.
On Dec. 27, 2021, FDS announced that it had agreed to acquire CUSIP Global Services (CGS) from S&P Global. The acquisition should enable FDS to expand its critical role in the global capital markets, advancing its open data strategy. As a by-product of the transaction, FDS is also expected to receive an estimated tax benefit of $200 million.
For its fiscal first quarter, ended Nov. 30, 2021, FDS’ revenue increased 9.4% year-over-year to $424.72 million. The company’s adjusted operating income came in at $142.71 million, up 7.3% year-over-year. Its adjusted net income increased 12.6% year-over-year to $125.34 million. In addition, its adjusted EPS was $3.25, representing a 12.8% increase year-over-year.
For its fiscal 2022, FDS’ EPS and revenue are expected to increase 19.7% and 8.4%, respectively, year-over-year to $12.40 and $1.72 billion. Over the past nine months, the stock has gained 43.7% in price to close yesterday’s trading session at $444.51. It is currently trading 10.2% below its 52-week high of $495.40, which it hit on Dec. 29, 2021.
FDS’ POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. It has an A grade for Quality and a B grade for Stability. Within the Financial Services (Enterprise) industry, it is ranked #17 of 121 stocks. To see the additional ratings of FDS for Growth, Value, Momentum, and Sentiment, click here.
OneMain Holdings, Inc. (OMF)
OMF is a financial service holding company that provides personal loan products, offers optional credit insurance and other products, services loans owned by the company and third parties. It pursues strategic acquisitions and dispositions of assets and businesses. It also provides origination, underwriting, and servicing of personal loans. OMF is headquartered in Evansville, Ind.
OMF’s pre-tax income increased 10.2% year-over-year to $376 million for the third quarter, ended Sept. 30, 2021. The company’s net income increased 15.2% year-over-year to $288 million. Also, its EPS came in at $2.17, representing a 16.6% increase from the same period last year.
Analysts expect OMF’s EPS to increase 77.4% year-over-year to $10.77 in its fiscal year 2021. Its revenue is expected to increase 13.9% year-over-year to $3.92 billion in its fiscal 2022. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 24.5% in price to close yesterday’s trading session at $54.64. It is currently trading 15.6% below its 52-week high of $63.19, which it hit on July 22, 2021.
OMF’s POWR Ratings reflect solid prospects. The company has an overall B rating, which translates to a Buy in our proprietary rating system. It also has a B grade for Quality. It is ranked #3 of 52 stocks in the Consumer Financial Services industry. Click here to see the other ratings of OMF for Growth, Value, Momentum, Stability, and Sentiment.
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INTU shares were trading at $580.28 per share on Wednesday afternoon, up $1.57 (+0.27%). Year-to-date, INTU has declined -9.68%, versus a -0.87% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...
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