As market volatility whipsaws major indices and leaves investors wary of overstretched valuations in the more notable names, Bank of America is urging a pivot toward high-conviction plays flying under the radar.
While tech remains the primary engine of global growth, BofA’s latest research report suggests the best risk-reward may now lie in specialized fintech and cross-border payment platforms.
By identifying strong moats and massive addressable markets, experts at the bank are pointing to two specific names – Payoneer and PicPay – as candidates poised to thrive amidst the turbulence.
Payoneer: a $6 trillion moat in the making
Payoneer is emerging as a formidable force in the world of business-to-business (B2B) transactions, and BofA believes the market is drastically underestimating its reach.
Analyst Aditya Buddhavarapu rates PAYO at “buy” – highlighting a “multi-trillion dollar growth opportunity” that provides a massive runway for the fintech stock.
While many payment processors struggle with razor-thin margins, Payoneer is busy “building the moat” by focusing on the lucrative and underserved small-to-medium business (SMB) segment.
Buddhavarapu’s bullish thesis is centered on the sheer scale of the landscape PAYO inhabits.
“Payoneer’s positioning serves a very large addressable market with the [business-to-business total addressable market] at $6 trillion while marketplace payouts are $300 billon,” he noted.
With a price objective of $6, the investment firm sees Payoneer stock as “too attractive to ignore.”
In his research note, Buddhavarapu said PAYO’s differentiation lies in its sophisticated “account-centric experience tuned to SMB workflows,” and a web of regulatory coverage and partner rails that are difficult for rivals to replicate.
As the financial technology company continues to generate solid cash flow, Bank of America sees a host of positive catalysts that could drive shares significantly higher from current levels.
PicPay: a growth story trading at a discount
In the Latin American fintech market, PicPay is grabbing headlines following its initial public offering (IPO) earlier this year.
Despite a challenging March that saw PICS retreat nearly 40%, BofA’s senior analyst Mario Pierry recommends treating the dip as a golden opportunity to build a position at a deep discount.
According to the investment firm, PicPay is a “compelling growth story” that has already amassed a remarkable 43 million active users.
Its “buy” rating is predicated on the company’s unique ability to scale its ecosystem across a wide variety of business sizes and financial needs.
A key driver for PICS future valuation is its expansion into untapped territory.
“Revenue expansion should also be supported by new verticals, such as services to small- and medium-sized enterprises,” Pierry explained.
Furthermore, PicPay is leveraging its massive user base to boost profitability through a “wide array of credit offerings” and increased monetization of existing clients.
According to Pierry, the company boasts “strong earnings momentum” and “operational leverage gains,” yet its valuation remains notably attractive.
“Valuation multiples are discounted vs LatAm and global peers,” he noted, suggesting that for investors willing to look beyond domestic borders, PICS offers a rare combination of high-velocity growth and value-oriented pricing.
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