Financial technology (fintech) is a rapidly growing sector of the broader financial sector, and the revenues generated by companies in this space can be enormous. Boston Consulting Group estimates that the global fintech market will reach $1.5 trillion in sales by 2030.
This is just an estimate, of course, but it’s a good indicator of why companies are competing to be at the forefront of new technology. fintech Services. Two of these companies are already well positioned to benefit from the growth of fintech Sufi techniques (Nasdaq: SOFI) and PayPal (NASDAQ: PYPL). This is why.
SoFi has expanded rapidly over the years, adding new financial services and offerings that now include loans, investing, checking and savings accounts, loan refinancing, credit cards, and even estate planning.
To put SoFi’s growth in perspective, consider that the company had more than 1 million members at the beginning of 2020. In December, it announced that it now has more than 10 million Members – Increased membership 9x in just five years.
SoFi’s strong membership base has translated into impressive financial results. The company increased its sales by 30% in the third quarter of 2024 to $697 million, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 90% to $186.2 million.
SoFi stock has seen a massive rise over the past six months, rising 137% as of this writing. The gains have pushed up the premium on SoFi shares, which now have a price-to-earnings (P/E) of 74. That’s expensive by any standard, but starting with a small position could be smart for long-term investors who want to own a piece of the fintech leader.
Some investors may overlook PayPal when looking for fast-growing fintech companies, but this big fintech player likely has more growth to come. The company’s peer-to-peer payment app, Venmo, is a great example of how PayPal is willing to look into new areas of growth. Venmo is one of the leading payment apps, with an estimated 88 million users, compared to 52 million in 2020.
PayPal’s revenue rose 6% in the third quarter of 2024 to $7.8 billion, and its non-GAAP earnings rose 22% to $1.20 per share. It also ended the quarter with free cash flow of $1.4 billion and $16.2 billion in cash and cash equivalents.
The company’s 432 million global users are a testament to PayPal’s leading position in the fintech space. The 9% increase in total payment volume in the third quarter, to $422.6 billion, proves that the company knows how to convince its users to continue using its payment platforms.
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