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 Intuit Inc. (NASDAQ:INTU) 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).
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Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 82
Intuit Inc. (NASDAQ:INTU) is a global financial technology platform that allows consumers and small businesses to overcome their financial challenges. The company’s products include TurboTax, Credit Karma, QuickBooks, and Mailchimp which enable prosperity for approximately 100 million customers worldwide. While TurboTax does taxes from start to finish, Credit Karma works as an AI-powered platform assisting over 130 million members in the US in managing their financial lives. QuickBooks helps businesses with invoicing, expenses, inventory, and bank feeds. Mailchimp is an email marketing and automations platform.
As a global AI-driven expert platform powering prosperity for consumers, and small and mid-market businesses, Intuit has positioned itself well for durable long-term growth. The company mentions its investments in AI capabilities including knowledge engineering, machine learning, and GenAI, the scale of its data, and the large network of AI-powered virtual experts as its significant advantage.
The business segments of Intuit Inc. (NASDAQ:INTU) remain resilient and continue to be a strength. To better reflect the global reach of the Mailchimp and QuickBooks platform, the firm renamed the Small Business and Self-Employed Group to the Global Business Solutions Group. Intuit ended the fourth quarter and full year with robust financial performance. For the full year, total revenue was up 13% year-over-year, Consumer Group revenue was up 7%, Credit Karma revenue was up 5%, Small Business and Self-Employed Group revenue was up 19%, and Online Ecosystem revenue was up 20%. Simultaneously, the fourth quarter saw its total revenue increase by 17% to $3.2 billion.
The brand strength, robust segment-wise performance, solid financials, and AI investment which solidifies the firm’s strength in financial technology innovation make Intuit an attractive stock. Intuit Inc. (NASDAQ:INTU) is held by 82 hedge funds, as of Q2, with Fisher Asset Management as the most prominent shareholder in the company. The firm ranks 5th among the 10 best fintech stocks to buy in 2024.
Overall INTU ranks 5th on our list of the best fintech stocks to buy. While we acknowledge the potential of INTU 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 INTU 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.