Financial technology, or fintech, has ushered in a new era in banking and finance, harnessing artificial intelligence (AI), blockchain, and many other advanced technologies. Fintech has launched a challenge to traditional banks by focusing on technology and customer experience. It has endless applications in areas such as cryptocurrency, mobile banking, and investment platforms.
In addition, fintec has the potential to exploit unbanked and underbanked communities in rural areas, where traditional banking services are difficult to establish. In the USA, mobile payments expected to reach $ 125 billion in 2025. The global fintech market is expected to grow at a CAGR of 23.4% for a market value of $ 324 billion by 2026.
Given the industry’s growth outlook, Wall Street analysts expect fintech stocks UP Fintech Holding Limited (TIGR), Mogo Inc. (MOGO) and Elevate Credit, Inc. (ELVT), which are currently trading below $ 10, for a rally of over 55% of price in the short term.
UP Fintech Holding Limited (TIGR)
TIGR provides online brokerage services to Chinese investors. The company offers a brokerage platform that allows investors to trade stocks, warrants, and other financial instruments, and is accessible through the company’s app and website. He is based in Beijing, China.
On November 5, TIGR announced that its Singapore-based subsidiary, Tiger Brokers (Singapore) Pte. Ltd., had been approved to be a trading member of Singapore Exchange Securities Trading Limited and Singapore Exchange Derivatives Trading Limited. The company expects these developments to help improve its customer service.
In October, the company acquired Ocean Joy Securities Limited, a company licensed by the Hong Kong Securities and Futures Commission. This should strengthen TIGR’s presence in Hong Kong.
For its fiscal second quarter, ended June 30, TIGR’s total revenue increased 98.7% year-over-year to $ 60.23 million. This can be attributed to a 63.7% increase in commission income to $ 30.94 million from the prior year quarter. After interest charges, its total net income improved 95% from the same period last year to $ 55.40 million.
A consensus EPS estimate of $ 0.48 for the current year (FY2021) indicates a 220% year-over-year increase. Likewise, the consensus estimate of revenue of $ 257.15 million for the current year reflects an 85.7% improvement over the previous year.
The stock has gained 22.2% in the past year and 10.2% in the past five days to close yesterday’s trading session at $ 7.28.
TIGR’s 12-month median price target of $ 18.22 indicates a 150.3% upside potential.
Mogo Inc. (MOGO)
Headquartered in Vancouver, Canada, MOGO operates internationally as a financial technology company, providing digital solutions to clients that improve their financial health. It also operates a digital payment platform.
On November 9, MOGO and financial services firm Sun Life Financial Inc. (SLF) announced a pilot project to bring MOGO’s savings and investment app, Moka, to SLF members in the hope of increasing members’ savings.
On November 8, the company announced its new trade rewards program, allowing merchants to offer MOGO’s âgreenâ bitcoin rewards to customers. Regarding the program, Phil Barrar of MOGO said, âThis type of rewards program can work as part of a company’s existing rewards program and potentially help generate long-term financial benefits for their customers.
MOGO’s revenue increased 58% year-on-year to C $ 15.44 million ($ 12.32 million) in its fiscal third quarter ended September 30. Its gross profit improved 33.6% from the same period last year to C $ 12.18 million ($ 9.72 million). . His cash and cash equivalents the balance for the period was Can $ 45.58 million ($ 36.36 million), up 362.5% from the prior year quarter.
Analysts expect MOGO’s EPS to improve 19.6% year-on-year over the next year (FY2022). The Street expects its revenue to grow 35.5% from the current year to $ 60.60 million the following year.
MOGO stock gained 208.6% going last year to close yesterday’s trading session at $ 5.74. It has gained 52.3% since the start of the year.
A 12-month median price target of $ 12.50 indicates a 117.8% upside potential. Price targets range from a high of $ 13.00 to a low of $ 12.00.
Elevate Credit, Inc. (ELVT)
ELVT is an online credit solutions provider for non-privileged customers in the United States. Its offerings include online installment loans, lines of credit and credit cards. The company is based in Fort Worth, Texas.
On October 13, ELVT announced it was setting up a $ 50 million financing facility, with a scope of up to $ 100 million, to fund the growth of its customer catering Today Card product. limited by credit. The Today card is in high demand and has been the fastest growing brand over the past 12 months. Thus, the credit facility to finance the continued growth of the Today Card should be beneficial to the business.
In July, ELVT launched permanent payment support tools for non-privileged customers, with services like deferral options, interest rate reductions and zero late fees. This should improve the customer experience.
For its fiscal third quarter, ended September 30, ELVT’s revenue increased 19.8% year-over-year to $ 112.84 million. Its total operating expenses decreased 4.2% from the prior year quarter to $ 40.87 million.
The Street expects ELVT’s EPS to grow 223.8% year-on-year to $ 0.52 next year (FY2022). Likewise, an estimated turnover of 588.70 million euros for the coming year indicates an increase of 42.7% compared to the current year.
The stock has gained 24% of its price over the past year and 2.2% in the past five days to close yesterday’s trading session at $ 3.46.
The 12-month median ELVT price target of $ 5.50 reflects a 59% upside potential.
TIGR shares were trading at $ 6.85 per share on Wednesday afternoon, down $ 0.43 (-5.91%). Year-to-date, the TIGR has fallen -13.73%, compared to a 26.44% increase in the benchmark S&P 500 over the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. Following…