We recently compiled a list of the 10 Best Fintech Stocks To Buy in 2024. In this article, we are going to take a look at where Global Payments Inc. (NYSE:GPN) stands against the other fintech stocks.
A Breakdown of the Global Fintech Industry
Based on a collaboration between the World Economic Forum and the Cambridge Centre for Alternative Finance, a report revealed that the global fintech industry has been strong post-pandemic with the average global customer growth rates above 50% from 2021 to 2022. In this growing market, fintechs are bringing tailored financial services and products to underserved segments of the population. These segments make up a sizeable portion of the consumer base of fintech firms operating in both advanced economies and in emerging markets and developing economies.
For the second year in a row as reported by CNBC, payments serve as the largest individual industry segment with a 24% share, although it is really fragmented with many firms moving money across the globe. Alternate finance which encompasses crowd-funding apps and online lenders follows with a 16% share. Other segments and their relative shares include 14% of neo-banking, 12% of wealth technology, 10% of business process solutions, 10% of banking solutions, 8% of financial planning, and 6% of digital assets. Country-wise, the US serves as the single biggest fintech market which hosts 46% of the top 250 fintech companies. Meanwhile, the UK hosts 12% while India is home to 4% of these companies. India has replaced both Germany and France due to its rapidly increasing digital adoption.
Current Landscape for Fintechs
In the prevailing industry landscape, fintech companies that are on the lower end appear to be better off. Previously, Bank of America’s CEO mentioned the consumer to be very stable and not getting worse. On the contrary, JP Morgan Chase COO Daniel Pinto warned that net interest income is going to be challenging next year with the expected Fed rate cuts just on the horizon. Ally Financial CFO talked about worse conditions as its borrowers are facing job market weakness as an increasing concern other than inflation.
In an interview with CNBC, Dan Dolev, senior analyst in fintech equity research at Mizuho, emphasized the rising consumer credit concerns. In his opinion, the fintech players with more exposure to the lower income consumers are doing better. He mentioned that low-end consumers had a lot of steamy money that they spent beyond their means. These consumers have pulled back on their spending to pay back their loans after depleting their savings 6 or 12 months ago. Meanwhile, the prime consumers are now facing the same pressure subprime consumers faced several months ago.
Our Methodology:
In order to compile a list of the 10 best fintech stocks to buy in 2024, we first used stock screeners and relevant ETFs to make an extended list of the relevant companies with the highest market caps. Moving on, we shortlisted the top 10 stocks from our list which had the highest number of hedge fund holders. The 10 best fintech stocks to buy in 2024 have been arranged in ascending order of their hedge fund holders, as of Q2 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A payment terminal in action with customers apart of the experience.
Global Payments Inc. (NYSE:GPN)
Number of Hedge Fund Holders: 66
Global Payments Inc. (NYSE:GPN) is a financial technology company that offers payment technology and software solutions to its customers globally. The firm empowers simple, fast, and secure payments for which it has built a worldwide commerce ecosystem comprising 4.6 million merchant accounts, 4,000 tech partners, 1500 financial institutions, and over 100 industries. Global Payments delivers seamless payments for every business, leading software for specific industries, single-source employer solutions, and better processes for buyers and suppliers. The firm is headquartered in Georgia and has 27,000 team members globally.
Global Payments Inc. (NYSE:GPN) is a Fortune 500 company and has a reach extending across North America, Europe, Asia Pacific, and Latin America. The company claims to lead the industry in innovation, scale, and service. It has a powerful ecosystem of brands across various verticals, including globalpayments, Heartland, greatergiving, AdvancedMD, ECSI, and touchnet among others. As a leading global payments technology company, the firm is currently streamlining its operations and simplifying its portfolio to provide product-led customer-centric solutions. This move is expected to increase the company’s share while freeing up capital to invest in innovation. Against the uncertain macro environment, Global Payments is diversified enough in terms of geography, vertical markets, and revenue streams.
As the worldwide partner of choice for commerce solutions, Global Payments Inc. (NYSE:GPN) shows a consistently strong performance. The company recently closed its second quarter with high single-digit adjusted net revenue growth and double-digit adjusted earnings per share growth. Adjusted net revenues rose 6% to $2.32 billion while adjusted earnings per share climbed 12% to $2.93. Merchant Solutions saw single-digit organic growth due to the firm’s differentiated capabilities across its integrated software and point-of-sale businesses. The integrated business witnessed double-digit growth with strong booking trends while the vertical markets businesses had a double-digit growth in software bookings.
During the month of August, the firm appointed Robert Bob Cortopassi as its new president and chief operating officer. Under the new growth-oriented leader who has a solid 12-year experience at the company, the firm is poised to grow. As of Q2, the company is held by 66 hedge funds thereby ranking on our list of the best fintech stocks to buy in 2024. Pzena Investment Management is the largest shareholder in the company.
Overall GPN ranks 8th on our list of the best fintech stocks to buy. While we acknowledge the potential of GPN 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 GPN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
