3 Fintech Stocks to Buy on the Dip: June 2024
If you’re keen on fintech and waiting for the perfect buying opportunity, here are the best fintech stocks to buy on the dip this June.
Fintech companies have been a hit because they complement the solid but rather slow traditional financial system. Before fintech went mainstream, you could expect to receive your money after days, thanks to the red tape that’s inherent in TradFi.
Now, thanks to fintech, businesses and individuals have better hope of having their payments processed in a more timely fashion and without being stranded for days. This means fintech stocks (that is, fintech companies that trade publicly) aren’t going out of vogue anytime soon, and fintech investors are sure to reap tidy dividends in the coming years.
Here are our best picks for fintech stocks to buy on the dip this season.
StoneCo Ltd (STNE)
StoneCo (NASDAQ:STNE) is a fintech company that provides end-to-end payment solutions to small and medium-sized companies in Brazil.
The company was the first non-bank company to offer payment solutions for merchants in the company. Its stock came into bigger focus than ever when Warren Buffet’s Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) purchased a stake in the company in 2018 (before exiting that position in Feb).
StoneCo shares have shed over 35% year to date. That’s thanks in part to mixed results for its first quarter and the resignation of co-founder André Street.
However, StoneCo has tailwinds that make it an interesting proposition for a fintech stock to buy on the dip. For instance, lower short-term interest rates in Brazil render it a cost-effective growth opportunity for investors.
Investors will also be glad to know JPMorgan upgraded StoneCo stock from Neutral to Overweight this month, stating “appealing EPS potential.”
Lemonade Inc (LMND)
Lemonade (NYSE:LMND) is an insurance company for renters, homeowners, term life, cars and pets. The company, which was launched in 2015, differentiates itself from the competition by using AI in almost all its processes. It also targets the younger generation and invests in social impact as part of its appeal.
Though the company saw revenues go up 25% for the first quarter compared to the same period last year, its share price has been stuck in neutral for the most part this year and is down 20% compared to the previous year.
However, if the future of insurance is AI, then Lemonade will be at the forefront of this shift. And with that, there will be an appreciation in its stock value.
The company’s massive bet on AI might just pay off in the near future — as best evidenced by its stock going up 8% when CEO Daniel Schreiber appeared on CNBC to talk about why the insurance industry is ripe for the AI revolution.
As a company, Lemonade has interesting days ahead. It just might be one of the most promising fintech stocks to buy on the dip right now.
Adyen (ADYEY)
Adyen (OTCMKTS:ADYEY) shares are down 30% year over year (YOY) and plunged over 15% in April after the company reported weaker-than-anticipated first-quarter sales.
The payments processor reported that net revenue grew by 21% to 438 million euros ($469.3 million) in the first three months of the year, slightly missing analyst expectations. ADYEY stock is yet to recover from April’s slump.
But Adyen’s recent outlook shouldn’t dampen investor sentiment. That’s because ADYEY stock is up 83% from its epic drop last year. During that time, it lost a third of its valuation during an “apocalyptic” selloff spree. That demonstrates the Dutch company’s ability to bounce back even after a devastating period.
Looking further out, the question is whether Adyen can sustain this resilience, and analysts think it can. Out of 28 analysts, 17 rate Adyen a Buy, with three and eight giving it an Overweight and Sell rating, respectively. Adyen is definitely worth considering for one of the best fintech stocks to buy on the dip for your portfolio this June.
On the date of publication, Hope Mutie did not have (either directly or indirectly) any positions in the stocks mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com’s Publishing Guidelines.
