5 Mid-Cap Financial Technology Stocks to Buy on Recent Fed Rate Cut

Core Insights - The Federal Reserve has reduced the benchmark interest rate by 25 basis points to a range of 3.5-3.75%, marking a total reduction of 75 basis points in 2025 after a 1% cut in 2024, and will begin purchasing $40 billion in Treasury Bills [1] Group 1: Fintech Sector Performance - The fintech sector's performance is inversely related to interest rate movements, benefiting from a low-interest-rate environment which supports technological improvement and product innovation [2] - The expansion of mobile and broadband networks, along with advancements in AI and machine learning, positions fintech for significant growth, enhancing banking, payments, and investment solutions [3] Group 2: Recommended Fintech Stocks - Five mid-cap fintech stocks are recommended for investment: EVERTEC Inc. (EVTC), Enova International Inc. (ENVA), LendingClub Corp. (LC), OppFi Inc. (OPFI), and Bread Financial Holdings Inc. (BFH), all of which have favorable Zacks Ranks [4][9] - These stocks are expected to benefit from the Fed's rate cut, with improved earnings estimates for the upcoming year amid growing fintech demand [9] Group 3: Company-Specific Insights - EVERTEC Inc. (EVTC): Engaged in transaction processing primarily in Latin America and the Caribbean, with expected revenue and earnings growth rates of 5.3% and 4% respectively for next year [7][10] - Enova International Inc. (ENVA): Provides online financial services with expected revenue and earnings growth rates of 15.8% and 10.5% respectively for next year [11][12] - LendingClub Corp. (LC): Offers an online marketplace for loans, with expected revenue and earnings growth rates of 13.2% and 35.7% respectively for next year [13] - OppFi Inc. (OPFI): Provides a financial technology platform for consumer credit access, with expected revenue and earnings growth rates of 9.1% and 8.6% respectively for next year [14] - Bread Financial Holdings Inc. (BFH): Focuses on personalized financial solutions, with expected revenue growth of 3.3% and a decline in earnings of -9.6% for next year [15][17]