3 Top Fintech Stocks to Buy in November

As the fintech industry continues to evolve and gain traction, investors are looking for promising stocks that offer a mix of growth and stability. In this article, we will explore three top fintech stocks to consider in November, each with its unique business model and growth prospects. These stocks have shown resilience in the face of market downturns and have the potential to generate significant returns for investors.
1. Robinhood (HOOD) Robinhood is a popular fintech company that offers commission-free trading and a gamified approach to investing. Its user-friendly platform has attracted millions of younger investors, driving growth in funded customers and assets under custody (AUC). In 2023, Robinhood's revenue surged 37% to $1.87 billion, surpassing its pandemic-era high in 2021. The company's subscription-based Gold plan has also contributed to its growth, with 2.2 million paid subscribers by the end of the third quarter of 2024. Analysts expect Robinhood's revenue to rise 38% in 2024, with its first annual profit since 2020. With a valuation of 40 times forward earnings and 8 times next year's sales, Robinhood is reasonably valued and presents an attractive opportunity for investors.
2. Upstart (UPST) Upstart is a fintech company that uses AI-powered technology to approve loans for banks, credit unions, and auto dealerships. Its platform reviews non-traditional data points, such as an applicant's education, GPA, and previous jobs, to approve a wider range of loans. This approach helps Upstart's partners reach younger and lower-income applicants with limited credit histories. In 2021, Upstart's revenue soared 264% as low interest rates sparked a lending frenzy among its financial partners. However, its growth stalled out in the following two years due to soaring interest rates and reduced lending activity. For 2024, analysts expect Upstart's revenue to rise 11% as its adjusted EBITDA stays negative. With a valuation of 6 times next year's sales, Upstart is an undervalued growth play that could benefit from a recovery in interest rates.
3. Affirm (AFRM) Affirm is a leading provider of buy now, pay later (BNPL) services, which allow merchants to break purchases into smaller installments. This makes it an attractive option for customers who can't get approved for credit cards and usually charges merchants lower fees than traditional card payment networks. Affirm's revenue surged 71% and 55% in fiscal 2021 and fiscal 2022, respectively, as soaring online purchases and social media marketing campaigns drove more consumers to try out Affirm and other BNPL platforms. However, in fiscal 2023, its revenue only rose 18% as it lapped those gains, inflation curbed consumer spending, and its top customer, Peloton, struggled to sell more connected bikes and treadmills. Affirm reduced its dependence on Peloton by gaining big customers like Amazon, Walmart, and Target, leading to a 46% revenue increase in fiscal 2024. With a valuation of 5 times this year's sales, Affirm is well-positioned to bounce back as consumer spending stabilizes.
In conclusion, Robinhood, Upstart, and Affirm are three top fintech stocks to consider in November, each with its unique business model and growth prospects. These stocks have shown resilience in the face of market downturns and have the potential to generate significant returns for investors. While their valuations may not be as high as some other fintech stocks, they offer attractive opportunities for growth-oriented investors.