Fintech Fortunes: 3 Underrated Stocks With Life-Changing Upside Potential

The fintech sector is full of companies that continue to play an important role in how we bank, transact, and invest. Amid the buzz around these companies, the industry’s biggest players remain the most underrated fintech stocks to buy.

It becomes extremely easy to overlook well-established players in the fintech space that possess extraordinary long-term potential. Indeed, they have grown to such an extent that investors often believe they have “missed the point”. However, this couldn’t be further from the truth given the tailwinds that will continue to drive growth over the next decade. These exciting investment opportunities can offer life-changing returns for those who stay the course.

Now here are the top underrated fintech stocks to buy in 2024 and beyond!

Mastercard (MA)

Master Card (New York stock market:MY) Should need no introduction when considering the most undervalued fintech stocks. It is one of the most notable brands in the global payments industry and stands to benefit immensely from the growth of cross-border payments.

Mastercard’s established position in payments provides a solid foundation for growth. With an extensive network spanning different countries and partnerships with major financial institutions, Mastercard enjoys a significant competitive advantage. If you’re reading this article right now, chances are you own a Mastercard credit card. This is the power of their brand and the extent of their reach across the world. The company continued its momentum in Q1FY24, after posting record results in FY2023. In Q1FY24, revenue grew 10% year-on-year to 6 .35 billion, with EPS up 30% year-over-year to $3.22 per share. Additionally, cross-border transactions increased by 18% compared to the previous year. As Mastercard continues to pilot its digital payments platform, investors should definitely keep it on their radar in 2024.

Fiserv (FI)

Fiserv (New York stock market:FI) might just be one of the most undervalued fintech stocks to buy in 2024. The company operates behind the scenes and is the technological backbone of banks and merchants.

Fiserv is unique in that its technology is very attractive. They provide a robust suite of solutions for banks, credit unions, investment companies and other financial institutions. This diversification not only mitigates risks but also allows the company to capitalize on emerging trends in various segments of the financial industry. Additionally, Fiserv’s strategic acquisitions and partnerships strengthen its market position and expand its revenue growth capabilities. In its latest quarterly results, Fiserv increased its revenue by 7% year-over-year to $4.88 billion. EPS climbed 39% year-over-year to $1.24 per share, with operating margin remaining strong at 24.2%. Management forecast revenue growth of around 15% in 2024 and raised its FY24 EPS guidance to between $8.60 and $8.75 per share. This makes Fiserv one of the most underrated fintech stocks to buy in May.

American Express (AXP)

American Express (New York stock market:AXP) is a premium card issuer and payment network known for its exceptional customer service and rewards programs. While traditionally targeting affluent customers, American Express has expanded its reach to younger generations.

The last 3 years have been fantastic for American Express. After the company’s pandemic slump in 2020, its post-pandemic recovery remained strong. American Express listens to the latest technology trends and continues to make key investments in AI, machine learning and data analytics to improve the customer experience, mitigate risks and identify new business opportunities. However, management’s attention has been focused on the Millennial and Gen Z segments. This has greatly contributed to the company’s growth in 2023, while benefiting from higher interest rates in the US economy. But their 60% year-over-year growth in customer accounts for this segment in the first quarter of 2024 is a telling sign of what’s to come. As management maintains double-digit revenue and EPS growth in 2024, AXP stock is one of the best undervalued fintech stocks to buy for life-changing returns.

As of the date of publication, Terel Miles did not hold (neither directly nor indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publishing Guidelines.