2 Brilliant Fintech Stocks to Buy Now and Hold for the Long Term

The fintech sector, projected for a 16.2% compound annual growth rate through 2032, is showing signs of recovery from recent macroeconomic pressures, positioning companies like Robinhood and SoFi Technologies as potential long-term growth investments despite trading below their all-time highs. Robinhood, a commission-free trading platform, has expanded its user base and revenue, with analysts projecting 15% revenue and 19% adjusted EBITDA CAGRs through 2027, currently valued at 28x this year's adjusted EBITDA. SoFi, a diversified financial services provider, significantly grew its member base and revenue, with analysts forecasting 20% revenue and 32% adjusted EBITDA CAGRs through 2027, trading at 15x this year's adjusted EBITDA as previous student loan and interest rate headwinds dissipate.

Analysis

The fintech sector is poised for significant expansion, with a projected compound annual growth rate (CAGR) of 16.2% from 2025 to 2032, driven by a continued shift away from traditional financial institutions. Despite recent struggles stemming from inflation and rising interest rates, which curbed consumer spending and loan activity, the sector is showing signs of recovery as interest rates decline. Many fintech stocks, including Robinhood and SoFi, are currently trading well below their all-time highs, potentially offering attractive entry points for long-term investors.
Robinhood (HOOD) has demonstrated robust operational growth, increasing its year-end funded accounts from 22.7 million to 25.2 million and assets under custody from $98 billion to $193 billion between 2021 and 2024. Analysts project a 15% revenue CAGR and a 19% adjusted EBITDA CAGR for Robinhood from 2024 to 2027. Despite trading 22% below its record closing price, its enterprise value of $51.4 billion translates to 28 times this year's adjusted EBITDA, which appears reasonable given its growth trajectory and market disruption potential.
SoFi Technologies (SOFI) has exhibited even more rapid expansion, quadrupling its member base from 2.5 million to 10.1 million and increasing products in use from 1.9 million to 14.7 million from 2021 to 2024. Its annual revenue surged from $1.01 billion to $2.61 billion in the same period, benefiting from its digital-only approach and the dissipation of student loan payment freezes and high interest rate headwinds. Analysts anticipate a 20% revenue CAGR and a 32% adjusted EBITDA CAGR for SoFi from 2024 to 2027, with its $13.5 billion enterprise value representing a more attractive 15 times this year's adjusted EBITDA, despite trading 49% below its record high.
Both companies are positioned to capitalize on favorable macroeconomic shifts and their distinct growth strategies, with Robinhood appealing to younger investors through commission-free trading and SoFi leveraging its diversified financial services ecosystem. SoFi's valuation appears more compelling relative to its projected growth rates, suggesting a potentially stronger risk-reward profile within the recovering fintech landscape.

Key Decisions for Investors

• Consider initiating or increasing long-term positions in high-growth fintech companies like Robinhood and SoFi, given the sector's projected 16.2% CAGR and their current valuations significantly below all-time highs.
• Evaluate SoFi Technologies (SOFI) for its stronger projected revenue (20% CAGR) and adjusted EBITDA growth (32% CAGR) through 2027, coupled with a more attractive valuation at 15 times this year's adjusted EBITDA.
• Monitor the ongoing impact of declining interest rates and consumer spending trends, as these macroeconomic factors will continue to influence the growth and profitability of fintech platforms.