In this article, we discuss the 10 best cash app stocks to invest in. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Cash App Stocks to Invest In.
The COVID-19 pandemic has marked a pivotal moment in the payments industry as it has played a significant role in accelerating consumer adoption of digital and contactless payment options. Fintech and payment processing companies like Square, Inc. (NYSE: SQ), Sea Limited (NYSE: SE), and PayPal Holdings, Inc. (NASDAQ: PYPL) are reaping the benefits from the strong consumer spending activities as the economy slowly re-opens in the post-pandemic era. These three cash app and fintech stocks have climbed 16%, 15%, and 11%, respectively, in the last three months.
The fintech sector was worth $128 billion in 2018, and the innovative industry is anticipated to reach $310 billion by 2022, growing at a compound annual rate of 24.8 percent, based on a market analysis published by The Business Research Company. To gain a portion of the fintech sector, tech giants such as Alphabet Inc. (NASDAQ: GOOGL) and Apple Inc. (NASDAQ: AAPL) are expanding their services by launching financial products and services. Alphabet Inc. (NASDAQ: GOOGL) is entering the Japanese fintech sector by purchasing Pring, a Tokyo-based cashless payment startup, for approximately $180 and $270 million, as reported by Nikkei. Alphabet Inc. (NASDAQ: GOOGL), Google's parent company, operates the e-wallet platform and online payment service, Google Pay. The digital wallet service was first introduced in 2015 as Android Pay and then relaunched as Google Pay in 2018.
Meanwhile, Apple Inc. (NASDAQ: AAPL) is working with Affirm Holdings, Inc.'s (NASDAQ: AFRM) PayBright to launch a Buy Now, Pay Later (BNPL) service for Apple items in Canada beginning August 11, as mentioned in a Bloomberg report. Ananda Baruah of Loop Capital maintained a Buy rating on Apple Inc. (NASDAQ: AAPL) on July 29 and increased the firm's price target to $165 per share from $150. Shares of Apple Inc. (NASDAQ: AAPL) climbed 15% in the last three months.
Wall Street analysts are bullish on digital payment solution provider Square, Inc. (NYSE: SQ) as the fintech company announced the $29 billion acquisition of Afterpay, an Australian Buy Now, Pay Later (BNPL) company. Shares of Square, Inc. (NYSE: SQ) jumped 7.1% in the last five days. On August 3, Canaccord analyst Joseph Vafi maintained a Buy rating on Square, Inc. (NYSE: SQ) and increased the firm's target to $310 per share from the previous $280, highlighting the Afterpay Limited (OTC: AFTPY) acquisition will accelerate Cash App's buy now, pay later feature.
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Our Methodology
We picked stocks that offer products and services related to money transfers, cash or cashless payments, digital wallets, payment processing, and fintech. The stocks on our list were picked based on their fundamentals and prospects for growth based on key business characteristics. We also considered analysts' ratings and hedge fund sentiment while choosing these stocks.
10. Fiserv, Inc. (NASDAQ: FISV)
Number of Hedge Fund Holders: 75
We start our list of the 10 best cash app stocks to invest in with Fiserv, Inc. (NASDAQ: FISV). The Wisconsin-based fintech company provides digital commerce services, digital banking, and credit and debit card processing. Fiserv, Inc. (NASDAQ: FISV) offers over 100 million banking users worldwide digital financial services.
Fiserv, Inc. (NASDAQ: FISV) saw its stock gain 1.5% on July 13 after the New York Fed published its Survey of Consumer Expectations, revealing that consumers expect mean household expenditure to rise by 5.2% in June. On July 16, Ivan Feinseth of Tigress Financial maintained a Buy rating on Fiserv, Inc. (NASDAQ: FISV) and set a 12-month price target of $148 per share. The fintech firm is well-positioned to capitalize from e-payments and post-pandemic operations, according to the analyst.
The company has a market cap of $72 billion. In the second quarter of 2021, Fiserv, Inc. (NASDAQ: FISV) reported an EPS of $1.37, beating estimates by $0.09. In the second quarter, the company's revenue grew 17% year over year to $4.05 billion and beating revenue estimates by $141.3 million. The stock has gained 9% in the last twelve months.
At the end of the first quarter of 2021, 75 hedge funds in the database of Insider Monkey held stakes worth $2.75 billion in Fiserv, Inc. (NASDAQ: FISV), down from 98 in the previous quarter worth $5.18 billion.
Just like Alphabet Inc. (NASDAQ: GOOGL), Apple Inc. (NASDAQ: AAPL), Square, Inc. (NYSE: SQ), Sea Limited (NYSE: SE), and PayPal Holdings, Inc. (NASDAQ: PYPL), Fiserv, Inc. (NASDAQ: FISV) is a good cash app stock to invest in according to market analysts.
9. Shopify Inc. (NYSE: SHOP)
Number of Hedge Fund Holders: 91
Shopify Inc. (NYSE: SHOP) is ranked ninth on the list of the 10 best cash app stocks to invest in, as the Canadian e-commerce platform has evolved into a payments company. In 2013, Shopify Inc. (NYSE: SHOP) debuted Shopify Payments, a payment solution for merchants with a 2.9% and 30 cents fee per transaction on a basic plan.
In the second quarter of 2021, Shopify Payments' gross payments volume (GPV) grew to $20.3 billion, which accounted for 48% of GMV processed in the quarter, a 45% increase year over year. In the second quarter, the company's revenue grew 57% year over year to $1.12 billion and beating revenue estimates by $69.15 million. Shopify Inc. (NYSE: SHOP) reported an EPS of $2.24 in the second quarter, beating estimates by $1.28.
On July 29, Wedbush analyst Ygal Arounian maintained an Outperform rating on Shopify Inc. (NYSE: SHOP) and raised the firm's target to $1,800 per share from $1,650 noting that the company's e-commerce gross merchandise volume will continue to grow. Shares of Shopify Inc. (NYSE: SHOP) climbed 33.2% in the past three months.
Out of the hedge funds being tracked by Insider Monkey, Hong Kong-based investment firm Tybourne Capital Management is a leading shareholder in Shopify Inc. (NYSE: SHOP) with 207,000 shares worth more than $302.4 million.
Just like Alphabet Inc. (NASDAQ: GOOGL), Apple Inc. (NASDAQ: AAPL), Square, Inc. (NYSE: SQ), Sea Limited (NYSE: SE), and PayPal Holdings, Inc. (NASDAQ: PYPL), Shopify Inc. (NYSE: SHOP) is a good cash app stock to invest in according to market analysts.
8. Square, Inc. (NYSE: SQ)
Number of Hedge Fund Holders: 92
Digital payment solutions provider Square, Inc. (NYSE: SQ) is ranked eighth on the list of 10 best cash app stocks to invest in. The San Francisco-based fintech company provides e-commerce and banking financial solutions. Square, Inc. (NYSE: SQ) also operates the peer-to-peer money transfer app Cash App, launched in 2013. As of June 2021, Cash App provided access to over 40 million monthly transacting active customers to the stock market.
On August 3, Canaccord analyst Joseph Vafi maintained a Buy rating on Square, Inc. (NYSE: SQ) and increased the firm's target to $310 per share from the previous $280, highlighting the Afterpay Limited (OTC: AFTPY) acquisition will accelerate Cash App's buy now, pay later feature.
In the second quarter of 2021, Square, Inc.'s (NYSE: SQ) total net revenue grew 143% year over year to $4.68 billion. Meanwhile, Cash App generated a gross profit of $546 million, up 98% year over year. The company reported an EPS of $0.66, beating estimates by $0.35. The stock has gained 29% year to date.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Square, Inc. (NYSE: SQ) 1,502,742 shares worth more than $366.3 million.
Just like Alphabet Inc. (NASDAQ: GOOGL), Apple Inc. (NASDAQ: AAPL), Sea Limited (NYSE: SE) and PayPal Holdings, Inc. (NASDAQ: PYPL), Square, Inc. (NYSE: SQ) is a good cash app stock to invest in according to market analysts.
7. Sea Limited (NYSE: SE)
Number of Hedge Fund Holders: 98
Singapore-based tech firm Sea Limited (NYSE: SE) operates SeaMoney, a digital financial solution that offers digital wallets, consumer and cash loans, and payment processing services available in Southeast Asia and Taiwan. Among products under SeaMoney are ShopeePay, AirPay, SPayLater, and SPinjam. Sea Limited (NYSE: SE) is ranked seventh on the list of 10 best cash app stocks to invest in.
SeaMoney's mobile wallet total payment volume surpassed $3.4 billion in the first quarter of 2021, more than triple compared to the same quarter in 2020. Sea Limited's (NYSE: SE) quarterly paying users for its mobile wallet services crossed 26.1 million. The company's first-quarter revenue came in at $1.8 billion, an increase of 146.7% year over year.
Sea Limited (NYSE: SE) was given a Buy rating and a $325 price target by New Street analyst Jin Yoon on June 25. Shares of Sea Limited (NYSE: SE) jumped 6% in the last month.
At the end of the first quarter of 2021, 98 hedge funds in the database of Insider Monkey held stakes worth $10.4 billion in Sea Limited (NYSE: SE).
Just like Alphabet Inc. (NASDAQ: GOOGL), Apple Inc. (NASDAQ: AAPL), PayPal Holdings, Inc. (NASDAQ: PYPL) and Square, Inc. (NYSE: SQ), Sea Limited (NYSE: SE) is a good cash app stock to invest in according to market analysts.
6. Apple Inc. (NASDAQ: AAPL)
Number of Hedge Fund Holders: 127
Apple Inc. (NASDAQ: AAPL) is ranked sixth on the list of 10 best cash app stocks to invest in, with Apple Pay being accepted as a digital payment option at 90% of retail outlets in the US. Apple Pay is the mobile payment platform used by 43.9 million people in the United States.
According to Bloomberg, Apple Inc. (NASDAQ: AAPL) is in collaboration with Affirm Holdings, Inc.'s (NASDAQ: AFRM) PayBright to launch a Buy Now, Pay Later (BNPL) service for Apple items in Canada beginning August 11.
In the third quarter of 2021, Apple Inc. (NASDAQ: AAPL) recorded an EPS of $1.30, beating estimates by $0.29. The company's third-quarter revenue was $81.43 billion, increasing 36% year over year, beating revenue estimates by $8.09 billion. The company's service segment, which includes Apple Pay, Apple TV+, and App Store, saw a 28% jump in revenue to $17.5 billion, up from $13.7 billion in the same period in 2020.
Ananda Baruah of Loop Capital maintained a Buy rating on Apple Inc. (NASDAQ: AAPL) on July 29 and increased the firm's price target to $165 per share from $150. Shares of Apple Inc. (NASDAQ: AAPL) climbed 15% in the last three months.
At the end of the first quarter of 2021, 127 hedge funds out of the 866 tracked by Insider Monkey held stakes in Apple Inc. (NASDAQ: AAPL), worth roughly $130.9 billion.
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Disclosure. None. 10 Best Cash App Stocks to Invest In is originally published on Insider Monkey.
