13 Most Promising Fintech Stocks to Buy

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1. StoneCo Ltd. (NASDAQ:STNE)

Average Upside Potential: 63.73%

Number of Hedge Funds: 35

StoneCo Ltd. (NASDAQ:STNE) serves as a provider of financial technology solutions to help merchants and integrated partners conduct e-commerce seamlessly. The company caters to clients that transact online, offline, or with an omnichannel sales approach. The firm has the mission of becoming the best financial operating system for Brazilian merchants.

The company defines its focus on empowering clients to grow their businesses as a key differentiator that enables client retention. It serves with its financial and software solutions with the best service in the industry. Some of the top competitive advantages include superior client service, a comprehensive merchant platform, and tech-enabled distribution. The fintech has demonstrated strong revenue growth, accelerating profitability, and improving earnings over the past 3 years.

The strength across the whole business was evident in the Q2 results. In payments, MSMB Card Total Payment Volume increased by 17.4% year-over-year reflecting market share gains within the segment. In banking, the company reached 2.7 million active banking clients and 6.5 billion reais in deposits. The profitability of the software business also remains stable on a recurring basis. Simultaneously, the credit portfolio grew and reached R$ 712 million with strong quality in the quarter.

With a business diversified across payments, banking, software, and credit, StoneCo Ltd. (NASDAQ:STNE) has ample opportunities for business growth ahead of it. The stock is held by 35 hedge funds, as of 2024’s second quarter.

While we acknowledge the potential of STNE as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than STNE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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