Fintech has ushered in significant changes in the way the financial industry functions. It has allowed governments to introduce essential financial services to unbanked and underbanked communities. In addition, the industry has helped improve payments processing, insurance, and lending.
The fintech industry has played a significant role, helping the world adapt to the rapid ongoing digitalization. Fintech innovations have brought down the transaction costs of financial services. Due to its easy accessibility and application and integrated technological advancements, fintech companies are also helping to create a more financially inclusive world. 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.
So, we think foreign fintech stocks such as MercadoLibre, Inc. (MELI), PagSeguro Digital Ltd. (PAGS), and StoneCo Ltd. (STNE) could be great additions to one’s watchlist. Wall Street analysts expect them to gain more than 60% in price in the near term.
MercadoLibre, Inc. (MELI)
MELI is an e-commerce company based in Buenos Aires, Argentina. The company enables commerce through its marketplace platform, which is designed to provide users with a portfolio of services to facilitate commercial transactions. It offers e-commerce services such as MercadoLibre Marketplace, MercadoPago payments solution, and MercadoLibre advertising program.
On December 13, 2021, MELI announced the acquisition of Redelcom, which operates as a payment services provider and provides point-of-sale terminals in Chile. The acquisition will likely strengthen its payments operation in Chile and the business position of its MercadoPago unit.
MELI’s revenue for the fiscal third quarter, ended September 30, 2021, increased 66.5% year-over-year to $1.85 billion. The company’s net income increased 533.3% year-over-year to $95.22 million. Also, its EPS came in at $1.92, up 585.7% year-over-year.
Analysts expect MELI’s EPS and revenue for its fiscal 2021 to increase 3,887.5% and 75.4% year-over-year to $3.03 and $6.97 billion, respectively. Over the past three months, the stock has declined 21.7% in price to close yesterday’s trading session at $1,316.28. However, Wall Street analysts expect the stock to hit $2,142.86 in the near term, indicating a potential 62.8% upside.
PagSeguro Digital Ltd. (PAGS)
Headquartered in Sao Paulo, Brazil, PAGS is a fintech company that offers multiple digital payment solutions to micro-merchants, and to small- and medium-sized companies. Its end-to-end digital ecosystem helps its customers to accept payments and manage their businesses.
During Black Friday on November 26, 2021, PAGS marked another all-time daily high, with its TPV reaching more than R$1.10 billion ($0.19 billion). From November 1 till November 29, its TPV grew more than 45% year-over-year, according to the Brazilian Cards Association data. This reinforces its commitment to keep helping its merchants grow their businesses.
For the fiscal third quarter ended September 30, 2021, PAGS’ total revenue and income increased 56% year-over-year to R$2.77 billion ($0.49 billion). The company’s net income increased 22% year-over-year to R$321.55 million ($57.08 million). In addition, its EPS came in at R$0.96, up 21% year-over-year.
For its fiscal year 2022, PAGS’ EPS is expected to increase by 38.5% year-over-year to $1.08. Its revenue for the quarter ending December 31, 2021, is expected to increase 40.8% year-over-year to $540.28 million. The stock has declined 53.8% in price year-to-date to close yesterday’s trading session at $26.28. However, Wall Street analysts expect the stock to hit $50.83 in the near term, indicating a potential upside of 93.4%.
StoneCo Ltd. (STNE)
Headquartered in George Town, Cayman Islands, STNE is a fintech company that provides an end-to-end, cloud-based technology platform to conduct electronic commerce across in-store, online, and mobile channels. It has designed a cloud-based platform that helps clients connect, get paid, and grow their businesses while meeting the rapidly changing demands of omnichannel commerce.
STNE’s TPV for the fiscal third quarter, ended September 30, 2021, increased 7.6% year-over-year to R$75 billion ($13.31 billion). The company’s total revenue and income increased 57.3% year-over-year to R$1.46 billion ($0.26 billion).
Analysts expect STNE’s EPS and revenue for its fiscal 2022 to increase 170.4% and 67.4%, respectively year-over-year to $0.73 and $1.38 billion. The stock has declined 80.4% year-to-date to close yesterday’s trading session at $16.39. However, Wall Street analysts expect the stock to hit $31.67 in the near term, indicating a potential 93.2% upside.
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MELI shares were unchanged in premarket trading Wednesday. Year-to-date, MELI has declined -21.43%, versus a 29.25% 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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