By Joshua Rodriguez via Iris.xyz
From the way that we read to the way that we order goods, drive, or even invest, technology has led to an evolution in the way that we do just about everything.
Perhaps nowhere is the effect of technology on our day to day lives more apparent than in the world of finance. Today, we look to mobile apps for budgeting tips, manage our financial accounts on computers, tablets, and phones, and send money to friends with the click of a button.
As the world of financial technology, or simply FinTech, continues to evolve, opportunities are being created in the stock market. Here are the FinTech investment opportunities that I believe offer up the most potential for investors.
1. Square (NYSE: SQ): Looking Beyond Payment Processing to Add Value
One stock I’m watching closely is Square SQ [NYE] – $67.95. Co-founded and led by Jack Dorsey, also CEO of Twitter TWTR [NYE] – $40.05 , Square gets quite a bit of attention from the investing community.
When investors think about Square, the first thing that tends to come to mind is mobile payments, and for good reason. By late 2011, the company announced that one out of every eight merchants that accept credit cards uses its platform. Since then, the figures have grown dramatically. Today, millions of merchants are using the company’s technology to process payments.
Nonetheless, while payment processing is big business, it’s not the only value that square brings to the table. In late-December, the company issued an SEC filing disclosing its intentions to launch a wholly-owned bank.
This was an important move. Investors already know the power of Square in the payment processing space. After all, the company was the pioneer of card readers that could be plugged into mobile devices for payment processing.
Nonetheless, payment processing fees are pretty small. So, the fact that the company is branching into more traditional banking services gives it the ability to expand margins, further providing value for investors.
Square has also consistently shown growth on a quarter over quarter and year over year basis. This growth can be seen clearly in the company’s most recent earnings report. Adjusted revenue came in at $489 million, a 59.3% year over year increase. Adjusted earnings came in at $0.11, showing strong growth from $0.06 year over year. The company also beat analyst expectations, which called for revenue of $479.6 million and earnings of $0.08 per share.
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