The fintech stocks surging in the AltFi Fintech Index amid a market rally
Is FOMO back for listed fintech stocks? Early indications say...yes
Towards the end of the calendar year, as the Christmas holidays approach, financial journalists and other market watchers like to point to a quasi-fictional force of nature they dub the 'Santa Rally'.
The idea is that the closing weeks of the year bring a dose of festive bullishness to investors and the result is a rallying stock market.
Whether true or not, stock markets are soaring (a little earlier than proscribed by the Santa Rally), with fintech stocks among the biggest beneficiaries.
While the AltFi Fintech Index has not quite hit a 15-month high, as the Nasdaq index has recently, nor had its best three weeks since 2020, as the S&P 500 has also, many of its constituents have been on an impressive rally upwards.
In this article, we take a look at the index's top ten performers since the rally began on 27 October 2023, a period where the AltFi Fintech Index has leapt 19.6 per cent. All have made over 30 per cent during this period.
Bakkt - 56.73%
Crypto platform Bakkt is the the index's strongest performer during the past month, thanks in part to a recovery in crypto markets as well as regular stock markets. The US-based company has also recently announced a shift towards offering more custodial services as well as plans for international expansion.
Adyen - 55.61%
Since its public market debut in 2018, Adyen has been something of a fintech bellwether in the stock market, rising rapidly until 2021 when it started to head south. In August 2023, however, it saw a huge drop prompted by Q2 earnings that came in below expectations. More recently, investors are betting the selling was overdone.
Lemonade - 38.34%
Digital insurance fintech Lemonade is the index's third-best performer since the market rally began. Its recent surge has pushed its market capitalisation above $1bn. The company, which claims to be powered by AI, has continued to see revenue grow rapidly to more than $400m per quarter.
Cloud payments company, which is backed by Warren Buffet’s Berkshire Hathaway investment vehicle comes in at fourth place. While its recent rally is impressive, it is still down more than 80 per cent from its 2021 high.
Despite rising losses at Shopify, its stock is soaring off the back of strong revenue growth, with further growth expected by analysts over the coming 12 months. Its 2023 performance stands in contrast to its lacklustre run in 2022 when sales stagnated.
Next on our list is our second crypto firm and one of the larger constituents in the AltFi Fintech Index, in part thanks to a recent upswing prompted by investors moving out of Binance in favour of Coinbase.
Next up is another lender. Affirm is one of the largest providers of ‘buy now, pay later’ in the US and has deals with Amazon and Booking.com among many others. The company has a market capitalisation of over $6.2bn and recently reported results better than analysts’ expectations.
Block's stock is up more than a third in this 30-day period, as it pushes for profitability. Investors back its turnaround story as well as its potential to benefit from an upward swing in crypto prices.
Berlin-based Hypoport has been bouncing back after a torrid three years, despite recently issuing guidance that it would materially lower revenues next year.
Shift4 Payments +31.64%
In the third quarter of 2023, Shift4 Payments saw its revenue leap 23 per cent year on year. Despite declining margins, investors seem to be back in its longer term growth story.
International Money Express +30.09%
In August remittance the firm - known as ‘Intermex’ was hit by disappointing Q2 earnings but despite decreasing net income, its revenue growth again appears compelling to investors