Even though data security breaches and increasing cyberattacks remain a concern for the fintech industry, the surge in digital financial transactions makes its prospects bright. Investors’ optimism about fintech stocks is evidenced by the Global X FinTech ETF’s (FINX) 8.4% gains over the past month, versus the SPDR S&P 500 Trust ETF’s (SPY) 3.6% returns.
Furthermore, the Federal Reserve could raise interest rates as early as 2023, and recently indicated its willingness to reduce asset purchases before the end of the year, which should help Fintech companies expand their profit margins. In addition, the Fintech industry holds immense growth potential over the long run due to the increasing adoption of advanced technologies and innovative solutions. According to an The ExpressWire report, the fintech market is expected to grow at an 8.6% CAGR between 2021 – 2024.
Therefore, we think it could be wise to add fintech stocks SelectQuote, Inc. (SLQT), GoHealth, Inc. (GOCO), and Mogo Inc. (MOGO) to one’s r watchlist. Wall Street analysts expect them to rally significantly in price in the near term.
SelectQuote, Inc. (SLQT)
SLQT is a technology-enabled, direct-to-consumer distribution platform that sells a range of insurance policies to various insurance carriers. The Overland Park, Kans.-based company operates through three segments: Senior; Life; and Auto & Home. It distributes senior health policies, such as Medicare Advantage, Medicare Supplement, Medicare part D, and other ancillary senior health insurance-related policies.
On August 3, 2021, SLQT announced a new partnership with Zing Health for Medicare customers in Indiana, Illinois, and Michigan to promote community health in the greater Chicago, Detroit, and Indianapolis markets. Tim Danker, SLQT’s CEO, said, “Zing Health is a great addition to the SelectQuote Senior business as they seek to drastically improve health outcomes in diverse populations that are underserved.”
SLQT’s revenue surged 33% year-over-year to $188.40 million in its fourth quarter, which ended June 30, 2021. Its total assets grew 33.5% year-over-year to $1.43 billion. Its total submitted policies came in at 133,411, representing a 50% year-over-year increase. Also, its approved policies were 117,226, up 43% year-over-year.
SLQT’s EPS is expected to be $1.01 in its fiscal year 2022, representing a 23.2% year-over-year increase. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. The company’s revenue is expected to increase 76.4% year-over-year to $937.82 million in its fiscal year 2021.
The stock has gained 38.5% in price since hitting its 52-week low of $7.72 on August 26, 2021, to close yesterday’s trading session at $11.20. Wall Street analysts expect the stock to hit $17.93 in the near term, which indicates a potential 60.1% upside.
GoHealth, Inc. (GOCO)
GOCO in Chicago is a health insurance marketplace and Medicare-focused digital health company. It operates through four segments: Medicare Internal; Medicare External; Individual and Family Plans and Other Internal; and Individual and Family Plans and Other External. Also, its products include Medicare Advantage, Medicare Supplement, Medicare prescription drug plans, and Medicare Special Needs Plans.
GOCO and GoodRx, Inc. (GDRX) agreed in August to bring GOCO’s Medicare enrollment and engagement solutions directly to GDRX users on the GDRX platform. Ben Miller, GOCO’s Senior Vice President, Strategic Partnerships, said, “Through this strategic partnership, we are giving our members affordable choices to further improve health outcomes, while also helping GoodRx’s users find and enroll in the right Medicare coverage plan that fits their needs, a real win-win.”
GOCO’s net revenue surged 55% year-over-year to $196.90 million for the second quarter, ended June 30, 2021. Its Medicare advantage approved submissions grew 58% year-over-year to $152,749. In addition, its Medicare internal revenue was $160.40 million, representing an 84% year-over-year increase.
Analysts expect GOCO’s EPS and revenue to increase 304.5% and 43.3%m respectively, year-over-year to $0.45 and $1.26 billion in its fiscal year 2021.
The stock has gained more than 12% in price since hitting its 52-week low of $4 on August 13, 2021, to close yesterday’s trading session at $4.88. Wall Street analysts expect the stock to hit $11.80 in the near term, which indicates a potential 141.8% upside.
Mogo Inc. (MOGO)
Financial technology company MOGO provides digital solutions to consumers to help them control their financial health. The Vancouver, Canada-based company offers the Mogo app, Mogo Visa Platinum Prepaid Card, MogoCrypto, MogoProtect, MogoMortgage, and MogoMoney. It also operates a digital payments platform.
On September 1, 2021, MOGO announced that it had completed the acquisition of Fortification Capital Inc. David Feller, MOGO’s Founder and CEO, said, “The acquisition of Fortification represents an important milestone towards the launch of our new commission-free stock trading platform, providing necessary components on the regulatory and technology side to complement our existing capabilities.”
MOGO’s revenue surged 29% year-over-year to $13.70 million for the second quarter, ended June 30, 2021. Its subscription and services revenue grew 81% year-over-year to $8.20 million. Its membership base came in at 1.70 million, representing a 63% year-over-year increase. In addition, its net income for the quarter was $9 million compared to a $1.60 million net loss in the year-ago period.
For its fiscal year 2022, analysts expect MOGO’s EPS to increase 8% year-over-year. In addition, the company’s revenue is expected to increase 51.4% year-over-year to $11.35 million for the quarter ending September 30, 2021.
The stock has soared 232.5% in price over the past year to close yesterday’s trading session at $5.42. Wall Street analysts expect the stock to hit $12.10 in the near term, which indicates a potential 123.2% upside.
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SLQT shares were trading at $11.37 per share on Friday morning, up $0.17 (+1.52%). Year-to-date, SLQT has declined -45.20%, versus a 21.57% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...
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