The year 2024 may have started slow for fintech stocks, but the sector flipped the script in the second half.

JPMorgan's Reginald L. Smith points to a $65 billion leap in the sector's market cap since mid-September, driven by upbeat third-quarter results, rate cuts and post-election tailwinds.

As 2025 beckons, Smith envisions improving funding conditions and loan volumes lifting fintech lenders — but advises caution on current valuations ahead of the fourth quarter earnings cycle.

Among the standouts are three fintech players rewriting the rulebook: Kaspi, Affirm and Shopify.

Kaspi's Big Leap: 25% Potential Upside, Says Analyst

Kaspi.kz JSC (NASDAQ:KSPI) isn't just a fintech favorite — it's redefining growth in the space. With a pending majority acquisition of Turkey's Hepsiburada, Smith notes Kaspi is tackling single-country exposure concerns head-on while expanding its total addressable market.

At just 8x 2025 earnings, Kaspi's robust fundamentals (30%+ revenue growth, 40%+ net income margins) note it is undervalued. The stock has a $137 price target, offering a potential 25% upside.

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Affirm's BNPL Domination: 12% Projected Upside

Smith highlights Affirm's strong credit metrics and reliable funding channels as key differentiators, with the company targeting profitability by FY25. With a $74 price target and 12% upside, Affirm remains a contender for fintech investors.

Shopify's Subtle Brilliance With 8% Upside

Shopify might not have the flashiest story, but its numbers tell a winning tale. Growing GMV (gross merchandise value) by $50 billion annually and revenue by $1.6 billion, Shopify is matching its COVID-19 pandemic-era performance while doubling its free cash flow margin.

Smith believes international growth and further upmarket penetration can keep Shopify on its 20% growth trajectory, even as subscription price increases loom as a future safety net. The $121 price target implies an 8% upside.

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