Financial technology (fintech) represents a transformative investment space in a hybrid sector merging finance and technology. The companies featured in the space encompass a variety of services, such as online banking, peer-to-peer payments, insurance, cryptocurrency and cybersecurity, among others.
They are relevant because they streamline financial services and enhance efficiency and security through innovations like mobile banking, online investing and payment processing.
The financial technology space is expected to benefit from expanding transaction volumes resulting from the widespread adoption of digital means. The growing digitization movement, triggered by the pandemic, is a major catalyst for this industry.
Here we recommend five fintech stocks with a favorable Zacks Rank to invest in and hold for the long term. These are Affirm Holdings Inc. AFRM, StoneCo Ltd. STNE, ACI Worldwide Inc. ACIW, Coinbase Global Inc. COIN and OppFi Inc. OPFI.
Catalysts to the Fintech Space
The performance of the fintech space is inversely related to the movement of interest rates. After three years of high interest rate, the Federal Reserve reduced the benchmark interest rates by 1% in 2024 to the range of 4.25-4.5%.
The CME FedWatch interest rate derivative tool currently shows more than 50% probability of another 1% reduction in the benchmark lending rate by the end of 2025. A lower interest rate regime will immensely benefit fintech companies.
Fintech's innovative nature positions it as a fascinating choice in the evolving financial landscape. With the expansion of mobile and broadband networks, fintech is poised for significant growth.
Consumer behavior is shifting toward digital platforms, fueled by convenience and cost-effectiveness. Fintech’s adaptability to changing technological needs and its ability to meet diverse consumer demands underpin its robust future.
The rise of artificial intelligence (AI) technologies and machine learning further revolutionizes banking, payments, and investments, offering efficient and secure financial solutions. Fintech companies offer exposure to a pioneering space that is redefining personal finance.
Buy 5 Financial Technology Stocks for Long-Term Holding
These five financial technology stocks have strong revenues and earnings growth potential for 2025. Moreover, these stocks have seen positive earnings estimate revisions over the last 60 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Zacks Investment Research
Image Source: Zacks Investment Research
Affirm Holdings Inc.
Affirm Holdings has achieved strong revenue growth through diverse income streams, including merchant network fees, interest from loans and virtual card revenues. AFRM expects revenues to be in the range of $3.13-$3.19 billion in fiscal 2025. Growing active merchant numbers, improving gross merchandise value, and the average balance of loans are driving merchant network revenues and interest income.
Key partnerships, like those with Apple Pay and Hotels.com, play a vital role in AFRM’s expansion. It has officially expanded to the United Kingdom, through a partnership with Alternative Airlines. Tapping into industries like travel, hospitality, and technology bode well for AFRM.
Massive Price Upside for AFRM Stock
Affirm Holdings has an expected revenue and earnings growth rate of 36.9% and 96.4%, respectively, for the current year (ending June 2025). The Zacks Consensus Estimate for the current-year earnings has improved 60% in the last 30 days.
The average short-term price target of brokerage firms represents an increase of 70.6% from the last closing price of $40.76. The brokerage target price is currently in the range of $50 to $86. This indicates a maximum upside of 111% and no downside.
StoneCo Ltd.
StoneCo is the leading provider of point-of-sale payment processing services. STNE’s technology empowers businesses to accept credit cards, debit cards, and digital wallet payments through its point-of-sale payment solution.
Small and medium-sized businesses can use STNE to bank, pay bills, and manage accounts. In addition, because STNE collects transaction data, the company can utilize that data to assess a client’s creditworthiness and offer loans. STNE offers a full suite of products that allow businesses to seamlessly conduct e-commerce transactions, analyze their client base, and manage customers.
Strong Price Upside for STNE Shares
StoneCo has an expected revenue and earnings growth rate of 4.1% and -6.7%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 9.6% in the last 30 days.
The average short-term price target of brokerage firms represents an increase of 12.2% from the last closing price of $11.83. The brokerage target price is currently in the range of $6 to $22. This indicates a maximum upside of 86% and a downside of 49.3%.
ACI Worldwide Inc.
ACI Worldwide develops, markets, installs, and supports a range of software products and solutions for facilitating digital payments in the United States and internationally. ACIW operates in three segments: Banks, Merchants, and Billers.
ACIW powers electronic payments for more than 5,000 organizations around the world. More than 1,000 of the largest financial institutions and intermediaries as well as 300 of the leading global retailers rely on ACIW to execute $14 trillion each day in payments. Further, thousands of organizations utilize our electronic bill presentment and payment services.
Through its comprehensive suite of software and SaaS-based solutions, ACIW deliver real-time, any-to-any payment capabilities and gives the industry's most complete omni-channel payments experience.
Impressive Price Upside for ACIW Stock
ACI Worldwide has an expected revenue and earnings growth rate of 6.8% and 6.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.6% in the last 30 days.
The average short-term price target of brokerage firms represents an increase of 22.9% from the last closing price of $51.31. The brokerage target price is currently in the range of $60 to $71. This indicates a maximum upside of 38.4% and no downside.
Coinbase Global Inc.
Coinbase Global provides financial infrastructure and technology for the crypto economy in the United States and internationally. COIN offers the primary financial account in the crypto space for consumers, a marketplace with a pool of liquidity for transacting in crypto assets for institutions, and technology and services that enable developers to build crypto-based applications and securely accept crypto assets as payment.
Moreover, COIN offers one of the most user-friendly platforms for investors because of its straightforward user interface and simple buying process. Coinbase also provides more sophisticated trading features for experienced users, including a professional trading platform and staking, which allow users to earn rewards for holding specific cryptocurrencies.
Huge Price Upside for COIN Shares
Coinbase Global has an expected revenue and earnings growth rate of 26.2% and 0.7%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 2.7% in the last 30 days.
The average short-term price target of brokerage firms represents an increase of 62.7% from the last closing price of $172.21. The brokerage target price is currently in the range of $169 to $400. This indicates a maximum upside of 179.1% and a downside of a mere 1.9%.
OppFi Inc.
OppFi provides a financial technology platform that powers banks to help everyday consumers gain access to credit. OPFI operates as a specialty finance platform for community banks to extend credit access in the United States. OPFI offers installment loans through the OppLoans platform. OPFI serves consumers who are turned away by mainstream options.
Excellent Price Upside for OPFI Stock
OppFi has an expected revenue and earnings growth rate of 9.7% and 12.6%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 10.3% in the last 60 days.
The average short-term price target of brokerage firms represents an increase of 38.4% from the last closing price of $8.35. The brokerage target price is currently in the range of $10.50 to $13. This indicates a maximum upside of 55.7% and no downside.
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