2 Incredibly Cheap Fintech Stocks to Buy Now

Financial Sector Overview - The financial sector is currently facing challenges due to rising interest rates, which have compressed margins as banks pay more on deposits than they earn from loans [1] - Economic uncertainty and fears of increased loan defaults are prevalent, particularly with potential recession risks and geopolitical tensions [1] - Despite these challenges, there are opportunities to invest in strong bank stocks that are leveraging new technologies [1] SoFi's Performance - SoFi has achieved GAAP profitability for the first time and expects to maintain profitability moving forward [2] - The member base of SoFi has grown to over 7.5 million, reflecting a 44% year-over-year increase [2] - The Galileo banking platform has expanded significantly, now hosting 145 million accounts compared to 60 million three years ago [2] - Adjusted net revenue rose by 34% year-over-year in the fourth quarter, with adjusted EBITDA margin increasing from 16% to 30% [2] - Management projects earnings per share to be between $0.55 and $0.80 in 2026, with annual growth of 20%-25% expected thereafter [2] SoFi's Market Position - SoFi currently has about $30 billion in total assets, representing roughly 1% of Bank of America's assets [3] - Despite strong growth, SoFi's stock trades at a slight discount to its book value [3] Bank of America's Competitive Edge - Bank of America has excelled in technology and efficiency investments, being recognized as the top bank for online and mobile banking [4] - The adoption of the bank's digital platform has increased to 76% of customer households, up from 70% in 2021 [4] - Zelle's payment volume has more than doubled in three years, and half of the bank's sales now occur through digital channels [4] - The bank has streamlined its physical presence, closing over 100 branches in 2023 [4] Bank of America's Growth Metrics - In Q1 2024, Bank of America added 245,000 net new checking accounts and over 1 million credit card accounts, marking the 21st consecutive quarter of growth [5] - The bank has seen $44 billion in net inflows to client investment accounts over the past year [5] - At the current stock price, Bank of America trades at 11.3 times forward earnings, offers a 2.7% dividend yield, and has a price-to-book ratio of 1.06 [5] Investment Outlook - Both SoFi and Bank of America are viewed as significantly undervalued, with potential for future growth despite short-term turbulence [6]