Wells Fargo analyst Jeff Cantwell's top five fintech companies were WEX Inc (NYSE:WEX), FleetCor Technologies, Inc (NYSE:FLT), Fidelity National Information Services, Inc (NYSE:FIS), Fiserv, Inc (NASDAQ:FISV) and Global Payments Inc (NYSE:GPN).
Fintech fundamentals remained strong in the first quarter of '22. Group revenue increased by 26.5% and was 230 bps better (median) than expected, while EPS growth was a healthy 13.8%, 260bps above its forecasts.
Fuel-centric names WEX and FleetCor and 'new-tech' businesses Marqeta, Inc (NASDAQ:MQ), Toast, Inc (NYSE:TOST), and Flywire Corp (NASDAQ:FLYW) reported strong results in 1Q.
In contrast, e-commerce-centric companies PayPal Holdings, Inc (NASDAQ:PYPL) and Shopify Inc (NYSE:SHOP) reported slowing growth as the economy normalized and consumer spend migrated back to physical/brick-and-mortar.
Meanwhile, the recovery in travel continued and was a nice boost to 1Q results, particularly for Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA). The dynamic generally benefited most Fintech given the apparent spillovers from the travel into other parts of the economy/consumer spending.
While Fintech management teams acknowledged rising concerns about the future macro-environment, WFC would describe their tone overall as cautiously upbeat' throughout the 1Q earnings season.
The commentary was generally constructive about company outlooks due to numerous tailwinds, including ongoing digitization, modernization, continued share gains (especially for 'new-tech' companies), and continued healthy recovery in consumer spending post-vaccine.
