10 Best Fintech Infrastructure for January 2026
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Market Overview & Selection Criteria
The fintech sector continues to show resilience amid broader market volatility, driven by digital payment adoption, emerging market growth, and infrastructure demands. These 10 best fintech stock picks were selected using ValueSense's proprietary stock screener, focusing on undervalued stocks with strong intrinsic value metrics, quality ratings above 6.0, robust revenue growth, and attractive ROIC. Criteria emphasized companies trading below their calculated intrinsic value, positive free cash flow generation where possible, and diversification across payment processors, e-commerce platforms, and banking tech. This methodology identifies investment opportunities in fintech infrastructure, prioritizing fundamental strength over short-term price momentum for long-term portfolio potential.
Featured Stock Analysis
Stock #1: Shopify Inc. (SHOP)
| Metric | Value |
|---|---|
| Market Cap | $204.1B |
| Quality Rating | 7.4 |
| Intrinsic Value | $27.9 |
| 1Y Return | 46.2% |
| Revenue | $10.7B |
| Free Cash Flow | $1,910.9M |
| Revenue Growth | 30.3% |
| FCF margin | 17.9% |
| Gross margin | 48.7% |
| ROIC | 57.9% |
| Total Debt to Equity | 8.9% |
Investment Thesis
Shopify Inc. (SHOP) stands out with a Quality rating of 7.4 and a market cap of $204.1B, showcasing exceptional efficiency in the e-commerce space. Despite its current price exceeding the intrinsic value of $27.9, the company's revenue of $10.7B grew 30.3%, supported by a healthy FCF of $1,910.9M and an impressive ROIC of 57.9%. Strong gross margin at 48.7% and FCF margin of 17.9% highlight operational leverage, while low Total Debt to Equity of 8.9% ensures financial flexibility. This positions SHOP as a leader in scalable merchant solutions, with 1Y Return of 46.2% reflecting market recognition of its growth trajectory.
Key Catalysts
- Accelerating revenue growth at 30.3% fuels expansion in global e-commerce.
- Superior ROIC of 57.9% indicates efficient capital deployment.
- Robust FCF generation of $1,910.9M supports reinvestment and buybacks.
- High gross margin of 48.7% provides pricing power amid competition.
Risk Factors
- Current price significantly above intrinsic value of $27.9 may limit upside.
- Dependence on merchant ecosystem exposes to economic slowdowns.
- Intense competition from Amazon and other platforms.
Stock #2: Nu Holdings Ltd. (NU)
| Metric | Value |
|---|---|
| Market Cap | $82.0B |
| Quality Rating | 6.8 |
| Intrinsic Value | $85.8 |
| 1Y Return | 60.1% |
| Revenue | $13.5B |
| Free Cash Flow | $3,665.8M |
| Revenue Growth | 28.5% |
| FCF margin | 27.1% |
| Gross margin | 43.0% |
| ROIC | 35.8% |
| Total Debt to Equity | 23.1% |
Investment Thesis
Nu Holdings Ltd. (NU), with a $82.0B market cap and Quality rating of 6.8, appears deeply undervalued at its intrinsic value of $85.8. Boasting revenue of $13.5B and FCF of $3,665.8M, NU delivered a stellar 1Y Return of 60.1% driven by 28.5% revenue growth. Metrics like 27.1% FCF margin, 43.0% gross margin, and 35.8% ROIC underscore its dominance in digital banking, particularly in Latin America. Moderate Total Debt to Equity of 23.1% supports scalable growth without excessive leverage.
Key Catalysts
- Strong revenue growth of 28.5% from customer acquisition.
- Exceptional FCF of $3,665.8M enables ecosystem expansion.
- High ROIC at 35.8% reflects profitable scaling.
- Attractive intrinsic value of $85.8 signals upside potential.
Risk Factors
- Emerging market exposure to currency fluctuations.
- Regulatory risks in high-growth regions.
- Competition from traditional banks digitizing operations.
Stock #3: PayPal Holdings, Inc. (PYPL)
| Metric | Value |
|---|---|
| Market Cap | $56.3B |
| Quality Rating | 6.0 |
| Intrinsic Value | $114.5 |
| 1Y Return | -32.5% |
| Revenue | $32.9B |
| Free Cash Flow | $5,565.0M |
| Revenue Growth | 4.5% |
| FCF margin | 16.9% |
| Gross margin | 46.8% |
| ROIC | 24.9% |
| Total Debt to Equity | 55.8% |
Investment Thesis
PayPal Holdings, Inc. (PYPL) offers a $56.3B market cap and Quality rating of 6.0, trading well below its intrinsic value of $114.5 despite a -32.5% 1Y Return. With revenue at $32.9B, FCF of $5,565.0M, and 4.5% growth, PYPL maintains solid profitability via 16.9% FCF margin, 46.8% gross margin, and 24.9% ROIC. Elevated Total Debt to Equity of 55.8% is offset by cash flow strength, positioning it for recovery in digital payments.
Key Catalysts
- Massive FCF generation of $5,565.0M funds innovation.
- Strong gross margin of 46.8% supports margin expansion.
- Intrinsic value of $114.5 indicates significant undervaluation.
- Established network effects in payments ecosystem.
Risk Factors
- Negative 1Y Return signals momentum challenges.
- Higher debt to equity at 55.8% amid slowing growth.
- Competition from fintech disruptors eroding market share.
Stock #4: Block, Inc. (XYZ)
| Metric | Value |
|---|---|
| Market Cap | $39.4B |
| Quality Rating | 6.8 |
| Intrinsic Value | $120.6 |
| 1Y Return | -24.9% |
| Revenue | $24.0B |
| Free Cash Flow | $1,831.7M |
| Revenue Growth | 0.5% |
| FCF margin | 7.6% |
| Gross margin | 40.7% |
| ROIC | 17.2% |
| Total Debt to Equity | 7.0% |
Investment Thesis
Block, Inc. (XYZ) features a $39.4B market cap and Quality rating of 6.8, undervalued relative to its intrinsic value of $120.6. Despite -24.9% 1Y Return, revenue reached $24.0B with $1,831.7M FCF, 0.5% growth, 7.6% FCF margin, 40.7% gross margin, and 17.2% ROIC. Low Total Debt to Equity of 7.0% provides balance sheet strength in payments and crypto infrastructure.
Key Catalysts
- Solid FCF of $1,831.7M despite modest growth.
- Low debt to equity at 7.0% enhances stability.
- High intrinsic value of $120.6 points to rebound potential.
- Diversified revenue from Square and Cash App.
Risk Factors
- Stagnant revenue growth at 0.5%.
- Negative 1Y Return reflects crypto volatility exposure.
- Regulatory scrutiny on digital assets.
Stock #5: Joint Stock Company Kaspi.kz (KSPI)
| Metric | Value |
|---|---|
| Market Cap | $14.8B |
| Quality Rating | 6.0 |
| Intrinsic Value | $627.7 |
| 1Y Return | -22.1% |
| Revenue | KZT 3,620.2B |
| Free Cash Flow | KZT 502.0B |
| Revenue Growth | 53.1% |
| FCF margin | 13.9% |
| Gross margin | 64.2% |
| ROIC | 39.4% |
| Total Debt to Equity | 18.7% |
Investment Thesis
Joint Stock Company Kaspi.kz (KSPI) has a $14.8B market cap and Quality rating of 6.0, with intrinsic value at $627.7 signaling deep value. Revenue of KZT 3,620.2B grew 53.1%, generating KZT 502.0B FCF, 13.9% FCF margin, 64.2% gross margin, and 39.4% ROIC. Total Debt to Equity of 18.7% supports aggressive expansion in Kazakhstan's digital finance.
Key Catalysts
- Explosive revenue growth of 53.1% in emerging markets.
- High ROIC of 39.4% drives returns.
- Exceptional gross margin at 64.2%.
- Intrinsic value of $627.7 offers substantial upside.
Risk Factors
- -22.1% 1Y Return amid local market pressures.
- Currency risks with KZT-denominated financials.
- Geopolitical exposure in Central Asia.
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Stock #6: ACI Worldwide, Inc. (ACIW)
| Metric | Value |
|---|---|
| Market Cap | $4,769.9M |
| Quality Rating | 6.5 |
| Intrinsic Value | $91.8 |
| 1Y Return | -13.2% |
| Revenue | $1,731.2M |
| Free Cash Flow | $312.9M |
| Revenue Growth | 7.0% |
| FCF margin | 18.1% |
| Gross margin | 49.7% |
| ROIC | 13.6% |
| Total Debt to Equity | 60.2% |
Investment Thesis
ACI Worldwide, Inc. (ACIW), at $4,769.9M market cap and Quality rating 6.5, trades below intrinsic value of $91.8. Revenue of $1,731.2M grew 7.0%, with $312.9M FCF, 18.1% FCF margin, 49.7% gross margin, and 13.6% ROIC. Total Debt to Equity of 60.2% is manageable for its payment software niche.
Key Catalysts
- Steady revenue growth of 7.0% in real-time payments.
- Strong FCF margin at 18.1%.
- Intrinsic value upside to $91.8.
- High gross margin of 49.7%.
Risk Factors
- -13.2% 1Y Return indicates underperformance.
- Elevated debt to equity at 60.2%.
- Dependence on banking clients.
Stock #7: Q2 Holdings, Inc. (QTWO)
| Metric | Value |
|---|---|
| Market Cap | $4,370.9M |
| Quality Rating | 6.0 |
| Intrinsic Value | $82.7 |
| 1Y Return | -30.2% |
| Revenue | $769.6M |
| Free Cash Flow | $169.8M |
| Revenue Growth | 13.9% |
| FCF margin | 22.1% |
| Gross margin | 53.4% |
| ROIC | 2.4% |
| Total Debt to Equity | 86.5% |
Investment Thesis
Q2 Holdings, Inc. (QTWO) boasts a $4,370.9M market cap and Quality rating of 6.0, undervalued at intrinsic value $82.7. Revenue hit $769.6M with 13.9% growth, $169.8M FCF, 22.1% FCF margin, 53.4% gross margin, but low 2.4% ROIC. High Total Debt to Equity of 86.5% warrants caution in digital banking platforms.
Key Catalysts
- Accelerating revenue growth of 13.9%.
- Excellent FCF margin at 22.1%.
- Strong gross margin of 53.4%.
- Intrinsic value potential at $82.7.
Risk Factors
- Weak ROIC of 2.4%.
- High debt to equity 86.5%.
- -30.2% 1Y Return.
Stock #8: DLocal Limited (DLO)
| Metric | Value |
|---|---|
| Market Cap | $4,293.9M |
| Quality Rating | 7.3 |
| Intrinsic Value | $27.8 |
| 1Y Return | 20.5% |
| Revenue | $960.2M |
| Free Cash Flow | $151.6M |
| Revenue Growth | 31.6% |
| FCF margin | 15.8% |
| Gross margin | 38.6% |
| ROIC | 253.4% |
| Total Debt to Equity | 0.7% |
Investment Thesis
DLocal Limited (DLO), with $4,293.9M market cap and top Quality rating 7.3, matches its intrinsic value near $27.8. Positive 20.5% 1Y Return backs $960.2M revenue, 31.6% growth, $151.6M FCF, 15.8% FCF margin, and extraordinary 253.4% ROIC. Minimal Total Debt to Equity of 0.7% highlights emerging market payment strength.
Key Catalysts
- Rapid revenue growth 31.6%.
- Stellar ROIC of 253.4%.
- Near debt-free balance sheet at 0.7%.
- Positive 1Y Return of 20.5%.
Risk Factors
- Price alignment with intrinsic value limits immediate upside.
- Emerging market volatility.
- Lower gross margin at 38.6%.
Stock #9: StoneCo Ltd. (STNE)
| Metric | Value |
|---|---|
| Market Cap | $4,003.9M |
| Quality Rating | 6.6 |
| Intrinsic Value | $94.2 |
| 1Y Return | 81.4% |
| Revenue | R$13.8B |
| Free Cash Flow | (R$1,301.5M) |
| Revenue Growth | 12.0% |
| FCF margin | (9.4%) |
| Gross margin | 74.6% |
| ROIC | 15.9% |
| Total Debt to Equity | 137.0% |
Investment Thesis
StoneCo Ltd. (STNE) at $4,003.9M market cap and Quality rating 6.6 trades below intrinsic value $94.2. Impressive 81.4% 1Y Return contrasts negative FCF of R$1,301.5M and -9.4% margin, with R$13.8B revenue, 12.0% growth, 74.6% gross margin, and 15.9% ROIC. High Total Debt to Equity 137.0% reflects Brazil fintech risks and rewards.
Key Catalysts
- Strong 1Y Return 81.4%.
- High gross margin 74.6%.
- Intrinsic value upside to $94.2.
- 12.0% revenue growth in key market.
Risk Factors
- Negative FCF and margin at -9.4%.
- Very high debt to equity 137.0%.
- Currency risks in Brazil.
Stock #10: Paymentus Holdings, Inc. (PAY)
| Metric | Value |
|---|---|
| Market Cap | $3,657.2M |
| Quality Rating | 7.0 |
| Intrinsic Value | $18.1 |
| 1Y Return | -12.8% |
| Revenue | $1,123.9M |
| Free Cash Flow | $144.5M |
| Revenue Growth | 44.3% |
| FCF margin | 12.9% |
| Gross margin | 24.8% |
| ROIC | 28.8% |
| Total Debt to Equity | 1.4% |
Investment Thesis
Paymentus Holdings, Inc. (PAY) ends the list with $3,657.2M market cap, Quality rating 7.0, and intrinsic value $18.1. -12.8% 1Y Return accompanies $1,123.9M revenue, 44.3% growth, $144.5M FCF, 12.9% FCF margin, 24.8% gross margin, and 28.8% ROIC. Low Total Debt to Equity 1.4% bolsters its billing software position.
Key Catalysts
- Highest revenue growth at 44.3%.
- Solid ROIC 28.8%.
- Positive FCF with low debt 1.4%.
- Growth trajectory in payments.
Risk Factors
- Lower gross margin 24.8%.
- Negative 1Y Return -12.8%.
- Competition in billing space.
Portfolio Diversification Insights
These fintech stock picks create a balanced stock watchlist with heavy allocation to payments (PYPL, XYZ, DLO, STNE, PAY) and digital banking (NU, KSPI, QTWO), complemented by e-commerce (SHOP) and infrastructure (ACIW). Large caps like SHOP and NU provide stability (60% allocation), while mid/small caps (KSPI, ACIW, QTWO, DLO, STNE, PAY) offer growth 40%. Geographic diversity spans US, Latin America, and Kazakhstan reduces regional risks. High-ROIC names (DLO, SHOP, KSPI) pair with cash flow leaders (PYPL, NU) for synergy, minimizing correlation in undervalued stocks portfolio.
Market Timing & Entry Strategies
Consider entry during fintech sector dips, targeting stocks below intrinsic value like NU, PYPL, and KSPI for 20-50% discounts. Monitor quarterly earnings for revenue acceleration (e.g., PAY's 44.3%, KSPI's 53.1%). Use dollar-cost averaging for volatile names (STNE, QTWO), entering on 10-15% pullbacks from 52-week highs. Pair with ValueSense screeners for Rule of 40 alignment in growth vs. profitability. Scale in over 3-6 months, prioritizing low-debt profiles amid rate uncertainty.
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FAQ Section
How were these stocks selected?
These 10 best fintech stock picks were filtered via ValueSense screener using quality ratings >6.0, strong ROIC, revenue growth, and trading below intrinsic value, focusing on diversified investment opportunities in payments and banking tech.
What's the best stock from this list?
DLocal (DLO) leads with 7.3 Quality rating, 253.4% ROIC, and 31.6% growth, though NU stands out for 60.1% 1Y Return and undervaluation—evaluate based on your risk tolerance using ValueSense tools.
Should I buy all these stocks or diversify?
Diversify across the list for sector balance, allocating 10-20% per position to mitigate risks like debt in QTWO/STNE while capturing growth from SHOP/NU; this stock watchlist supports 40/60 large/mid-cap mix.
What are the biggest risks with these picks?
Key concerns include high debt (QTWO 86.5%, STNE 137%), negative FCF (STNE), regional volatility (KSPI, DLO), and prices above intrinsic value (SHOP), balanced by strong cash flows in PYPL/NU.
When is the best time to invest in these stocks?
Optimal timing aligns with market pullbacks or earnings beats confirming growth; focus on undervalued stocks like PYPL ($114.5 intrinsic) during fintech rotations, using ValueSense charting for entry signals.