Some of the top names in the fintech industry have gone through corrections over the past year. Now, some investors may argue that the bearish sentiment could be slightly overblown. Block (Nasdaq: SQ) is an excellent case study for the upside many of these sleeping giants have. The company made a nice move Thursday on the heels of a positive investor day.
Another company fintech investors could see make a recovery in the near term is Sparta Commercial Services, Inc. (OTCMKTS: SRCO). SRCO is a financial solutions company with interests in cryptocurrency, financial services, e-commerce, and mobile app development.
SRCO is using a business strategy investors know well, diversification. The low-float company has experienced revenue growth recently and looks poised to accelerate that trend.
Currently, there are two main verticals driving SRCO's revenue growth:
Vehicle History Reports- The company's e-commerce technology earns SRCO a large majority of its revenue. Its subsidiary, iMobile Solutions, Inc., through Cyclechex, RVchex, CarVINreport and Truckchex, offer car buyers assurances and are available on Kelly Blue Book, Auto Trader, AllState, and various dealership websites. These reports have been sold in all 50 states and 62 countries.
Health and Wellness Products - New World Health Brands, Inc. a CBD and natural dietary supplement brand, is an example of a calculated risk paying off for SRCO. While health and wellness products wouldn't seem to fit a 'financial solutions' model on the surface, New World Health Brands was an opportunity for SRCO to leverage its e-commerce expertise in a fast-growing industry and so far this has proven profitable. Sales have grown by ~80% in the first 9 months of fiscal 2022 vs. the same period in 2021.
While the above verticals have created revenue growth on their own which should continue, SRCO has several other revenue streams that could start showing up in the balance sheet as soon as the next 10-Q.
Municipal Financing Business - The company's foundation was built on auto-financing. After the 2008 financial crisis, it shifted its focus from consumers to municipalities. When COVID hit, many of these municipalities received grants reducing their need for funding. However, these grants are drying up and SRCO has already announced several new municipal deals, so expect to see this reflected in increased revenue.
Mobile App Development- SRCO's iMobile Solutions subsidiary has signed several app development deals already in 2022, meaning new revenue sources.
Crypto-Payment App- SRCO's crypto-payment app is an exciting solution for merchants looking to accept cryptocurrency payments. This could be a massive revenue stream if it secures adoption.
Block (Nasdaq: SQ) held its investor day presentation on Wednesday, and several analysts came away from it with positive long-term outlooks about the company's prospects, according to The Fly.
Square (NYSE:SQ) - Earlier on in the week, Square was in the news after the Block Inc subsidiary announced that it had been successful in completing the acquisition of GoParrot. GoParrot is a marketing and ordering platform that is meant for restaurants and had been established back in 2017.
It seeks to provide restaurants with the opportunity to connect with customers easily. In this context, it is important to note that GoParrot had actually been a long-time partner of Square and its products had actually been integrated with the ecosystem at the latter.
SoFi Technologies (NASDAQ:SOFI) - When a company's Chief Executive Officer continues to buy shares then it is often seen as a positive. Hence, the SoFi Technologies stock is an interesting one to analyze at this point.
Over the course of the past six months, the fintech company has seen its stock tank by as much as 70% but since March, the company's CEO has been buying the stock steadily. Is this a signal to the rest of the market that the SoFi stock is undervalued at this point in time?
LendingClub (NYSE:LC) - The financial technology company LendingClub is one of the many companies in the sector that has been affected adversely amidst fears about consumption in trying economic conditions. The company had actually performed well in the first fiscal quarter and had generated earnings to the tune of as much as $0.39 a share.
The company decided to tighten its lending operations amidst the economic crunch but it has still managed to generate significant growth in origination volume. Additionally, projections for the full year had also been raised by LendingClub to $13.25 billion worth of loans. Hence, long-term investors could do well to keep the stock on their watch lists.
International Money Express (NASDAQ:IMXI) - Earlier on in the month International Money Express announced its financial results for the first fiscal quarter and produced strong numbers. The company managed to generate revenues of $114.7 million, which worked out to a year-on-year rise of as much as 21.2%. On the other hand, the net income stood at $11.7 million and that reflected year on year rise of 29.8%. It could well be a stock worth tracking.
BTRS Holdings Inc (NASDAQ:BTRS) - In Q1, Total revenue grew 8.8% year-over-year to $45.6 million, compared to $41.9 million for the same period in 2021. Gross profit, excluding depreciation and amortization, moved up 12.0% year-over-year to $26.7 million, compared to $23.9 million for the same period in 2021. Net loss was $29.0 million, compared to $22.8 million for the same period in 2021.
"Our great momentum continued in the first quarter, led by 16.3% year-over-year software and payments segment revenue growth and 33.6% adjusted software and payments growth," said Flint Lane, Founder and CEO of Billtrust.
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