Capitalize on changes in consumer credit with these actions
You are reading Entrepreneur United States, an international Entrepreneur Media franchise. This story originally appeared on MarketBeat
Consumer preferences are shifting rapidly thanks to seemingly endless innovation, meaning that investors able to identify companies that find ways to meet the new expectations are expected to reap huge rewards in the years to come. Just think of some of the huge consumer credit transformations that have apparently happened in the blink of an eye over the past few years.
Flexible payment options are now the norm as new services like buy now, pay later have taken the industry by storm. People also want convenient mobile platforms that allow them to easily manage all aspects of their finances in one place. Cutting-edge technologies like artificial intelligence are making it easier for consumers to get loan approval, which was a long overdue obsolete process for an overhaul. These trends are only accelerating after the pandemic, which has created many new opportunities that businesses can take advantage of.
That’s why we’ve put together a list of stocks below that can help investors take advantage of some of the fascinating changes we’re seeing in consumer credit. Let’s take a more in-depth look below.
Contributor Depositphotos.com/Depositphotos.com – MarketBeat
Buy now, pay later, services are here to stay, and Affirm Holdings is leading the pack. The company, which provides a platform for digital and mobile commerce, has already signed several high-profile deals with major retailers like Amazon and Target, which will allow shoppers to take advantage of the ability to pay for a purchase over time. by installments. Consumers are drawn to this payment option over traditional credit cards because it helps them get a loan with little or no interest, enjoy a quick and stress-free approval process, and keep up with the payments in a very convenient way.
Since companies like Affirm can help people make discretionary purchases without going into debt, this is lucky to have a huge impact on the consumer credit industry. Investors certainly recognize the potential of a company like Affirm, as the stock has risen over 44% since the start of the year and is poised to hit all-time highs. Affirm reported total revenue of $ 870.5 million, up 71% year-over-year, in fiscal 2021, and saw its active merchants grow 412% in the past. fourth quarter to nearly 29,000. The bottom line here is that consumers are looking for buy now, pay later options with merchants, which could mean big things for Affirm Holdings in the future.
Companies like SoFi Technologies are distinguished by their value proposition as a “one stop shop for consumer finance”. The company has developed a financial services platform that allows its members to borrow, save, spend, invest and protect their money in one place. While the convenience of being able to manage your financial life with a single company is certainly appealing, SoFi also offers some intriguing benefits to members, including personalized career advice, experiences and events, as well as an unemployment protection program. that really sets this fintech company apart.
The stock is currently recovering thanks to Morgan Stanley analyst Betsy Graseck, who launched a hedge with a price target of $ 25 and noted the strength of the company in its student loan financing business. SoFi has experienced 8 consecutive quarters of accelerating membership growth and achieved record second quarter adjusted net revenue of $ 237 million, up 74% year-on-year. It’s clear that the company has created something unique that could change the way consumers manage all of their finances going forward, which certainly makes it a stock to watch in the future.
This disruptive consumer credit company is leveraging artificial intelligence to change the way people get personal loans, which is one of the main reasons it should be on investor buying lists. Upstart Holdings delivers AI models to banking partners within a cloud-based consumer application that streamlines the end-to-end process of granting and servicing a loan. Consumers can quickly access affordable credit using the platform, and banks are drawn to it because it can reduce the risk and cost of lending for them.
Upstart stock has been a big winner since reporting huge second quarter earnings beaten last quarter, but there could be even more benefits in store for the company going forward. Keep in mind that the stimulus package is coming to an end, which could lead to more people seeking loans. The company is also entering the auto loan business, which could be another growth driver that will push stocks higher in the coming weeks. While the valuation here is sky-high, it’s safe to say that Upstart Holdings is a consumer credit changing company and has immense upside potential, making it one of the most important growth stocks in the world. Marlet.