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Beware of These 2 Popular but Overvalued Fintech Stocks -Breaking

by Mike Robinson

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© Reuters. The 2 Most Popular and Over-Valued Fintech Stocks You Should Be Aware Of

The future of the COVID-19-fueled, fintech boom is still uncertain. Banks have also been relaxing their credit requirements and increasing technology spending. This poses a threat to fintech’s competitive position. We believe that the most popular fintech stocks Upstart(NASDAQ:) or SoFi Technologies(SOFI) should be avoided as these stocks are now trading at very high valuations. Continue reading. The COVID-19 epidemic increased financial technology adoption, and lockdowns became the catalyst for digital finance adoption. A large portion of the population still prefers traditional payments methods, and might choose digital over them if offered the choice. It is unclear whether this shift towards digital transactions, which has been occurring in recent years, will continue.

The traditional competitors in fintech have seen their tech spending rise by 10% per year, with community banks leading the charge. Banks are projected to invest $1.69 million in technology by 2021 on average. In addition to lowering the interest rate and increasing credit lines for customers and employees, banks also eased credit requirements.

So, given the industry’s competitive threats, we think it may be best to avoid popular fintech stocks Upstart Holdings, Inc. (UPST) and SoFi Technologies, Inc. (SOFI), which look overvalued at their current price levels.

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