Investing in Canadian Fintech: Stocks to Watch in 2024

The Canadian fintech sector is expanding, with more opportunities than ever. Yet this stock remains undervalued.

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While Canadian financial technology (fintech) might be a more recent development, it’s becoming less and less volatile for investors. Fintech has quickly become an area of the market that has become essential. And it’s now a strong area for investment in 2024 as the market continues to recover.

With that in mind, today, we’re going to look at why Canadian fintech stocks could be one of the best places to invest in 2024 and, of course, some top fintech stocks to consider.

Canadian fintech: Stocks on top

The Canadian fintech sector has shown robust innovation, driving growth in areas like digital banking, payment solutions, and blockchain technology. Companies are continually developing new products and services that enhance financial accessibility and efficiency.

What’s more, the COVID-19 pandemic accelerated the adoption of digital financial services. More consumers and businesses are now comfortable with digital banking, mobile payments, and online financial management, creating a ripe market for fintech solutions.

Now, there has been a significant influx of investment and funding into the Canadian fintech sector. Venture capitalists and institutional investors are increasingly recognizing the potential of Canadian fintech startups, providing them with the necessary capital to expand and innovate. This has included strategic partnerships and even government initiatives. So, where should we invest?

Lightspeed stock

There are many fintech stocks to consider. But perhaps the best with the highest-growth opportunity is Lightspeed Commerce (TSX:LSPD). Lightspeed stock provides comprehensive point-of-sale (POS) and e-commerce solutions for retailers and restaurants. Their systems streamline operations, manage inventory, and enhance customer engagement. Their unified payments platform integrates seamlessly with their POS systems, providing a holistic solution for payment processing, which is on the way to 50% integration with current clients.

Lightspeed stock has secured contracts with renowned brands and Michelin-star restaurants, enhancing its reputation and market presence. Most recently, it added Uber to its list of clients as well through its Uber Eats platform.

As to earnings, Lightspeed stock reported a significant increase in revenue and customer base. In its latest financial results, Lightspeed highlighted a 118% year-over-year growth in Lightspeed Capital and a notable shift towards higher gross transaction value (GTV) customer locations, which have lower churn and higher lifetime value.

Furthermore, analysts have been optimistic about Lightspeed’s future. For instance, CIBC recently upgraded the stock from a “neutral” to an “outperform” rating, increasing the target price and reflecting confidence in its growth potential. 

And it looks like it will just keep getting better. For fiscal 2024, Lightspeed projects revenue between US$895 million and US$905 million. It also aims for break-even or better adjusted earnings before interest, taxes, depreciation, and amortization. This shows a solid financial outlook despite macroeconomic uncertainties.

Bottom line

Lightspeed stock may be down but don’t count it out. The Canadian fintech sector is poised for significant growth in 2024, driven by innovation, supportive regulations, and increasing digital financial service adoption. 

Lightspeed stock stands out as a top fintech stock due to its robust financial growth, strategic customer acquisitions, and continuous innovation in POS and payment solutions. With a strong revenue outlook and positive analyst recommendations, Lightspeed is well-positioned to capitalize on the evolving financial technology landscape, making it a compelling investment for Canadian investors seeking exposure to the fintech sector.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Canadian Imperial Bank Of Commerce and Lightspeed Commerce. The Motley Fool recommends Lightspeed Commerce and Uber Technologies. The Motley Fool has a disclosure policy.

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