Buy 3 Mobile Payment Stocks to Tap Solid Short-Term Upside Potential
The rapid shift from cash to digital transactions, driven by a push toward convenience and security, has led to meteoric growth in mobile payments. The space encompasses a broad spectrum of innovations, including payment infrastructure and software services, as well as virtual wallets and smartcards.
As the adoption of digital payments becomes increasingly commonplace, the mobile payments market is anticipated to experience meteoric growth over the long term. A higher Internet penetration rate and increased usage of smartphones contribute to the growing uptake of digital payments.
At this stage, we recommend three mobile payments stocks with a favorable Zacks Rank that have solid short-term price upside potential. These stocks are: ACI Worldwide Inc. ACIW, Paymentus Holdings Inc. PAY and Remitly Global Inc. RELY. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks year to date.
Image Source: Zacks Investment Research
ACI Worldwide Inc.
Zacks Rank #2 ACI Worldwide develops, markets, installs, and supports a range of software products and solutions for facilitating digital payments in the United States and internationally. ACIW operates in three segments: Banks, Merchants, and Billers.
ACIW powers electronic payments for more than 5,000 organizations around the world. More than 1,000 of the largest financial institutions and intermediaries as well as 300 of the leading global retailers rely on ACIW to execute $14 trillion each day in payments. Further, thousands of organizations utilize our electronic bill presentment and payment services.
Through its comprehensive suite of software and SaaS-based solutions, ACIW delivers real-time, any-to-any payment capabilities and gives the industry's most complete omni-channel payments experience.
Strong Estimate Revisions
ACI Worldwide has an expected revenue and earnings growth rate of 8.5% and 23.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the last 60 days.
ACIW has an expected revenue and earnings growth rate of 8.2% and 12%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 2.1% over the last 60 days.
Solid Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 36.9% from the last closing price of $49.19. The brokerage target price is currently in the range of $66-$70. This indicates a maximum upside of 42.3% and no downside.
Paymentus Holdings Inc.
Zacks Rank #2 Paymentus Holdings provides cloud-based bill payment technology and solutions in the United States and internationally. PAY offers electronic bill presentment and payment services, enterprise customer communication, and self-service revenue management to billers through a software-as-a-service, secure, and omnichannel technology platform. PAY’s platform's payment processing includes credit cards, debit cards, echecks, and digital wallets.
Strong Estimate Revisions
Paymentus Holdings has an expected revenue and earnings growth rate of 21.2% and 34.9%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 9.9% over the last 60 days.
PAY has an expected revenue and earnings growth rate of 17.9% and 20.9%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 5.9% over the last 60 days.
Solid Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 24.3% from the last closing price of $32.30. The brokerage target price is currently in the range of $45-$66. This indicates a maximum upside of 104.3% and no downside.
Remitly Global Inc.
Zacks Rank #1 Remitly Global is a mobile-first provider of remittances and financial services for immigrants. RELY a cross-border payment company engages in the provision of digital financial services in the United States, Canada, and internationally. RELY offers cross-border remittances and complementary financial services through a mobile application and website.
Strong Estimate Revisions
Remitly Global has an expected revenue and earnings growth rate of 21.4% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 13.8% over the last 60 days.
RELY has an expected revenue and earnings growth rate of 18.7% and 7%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 12% over the last 60 days.
Solid Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 51.1% from the last closing price of $21.28. The brokerage target price is currently in the range of $29-$36. This indicates a maximum upside of 69.2% and no downside.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.
Free: See Our Top Stock And 4 Runners UpPaymentus Holdings, Inc. (PAY) : Free Stock Analysis Report
ACI Worldwide, Inc. (ACIW) : Free Stock Analysis Report
Remitly Global, Inc. (RELY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
