3 Reasons to Buy This Under-the-Radar Fintech Stock You’ve Probably Never Heard of
Elevate Credit (NYSE: ELVT) is the only publicly traded fintech stock focused solely on the subprime market. The company went public this spring at $6.50 per share, and makes unsecured loans to high-risk borrowers across 40 states and the United Kingdom. While that seems like a very risky business, the company uses advanced Hadoop analytics that incorporate many more risk factors than traditional competitors, such as payday loan storefronts. This has led to very stable credit metrics over the company's lifetime as both a private and public company. In addition, management believes chargeoff rates would be relatively stable even in a recession, as once "Prime" borrowers would again fall into Elevate's subprime loan pool.
The company has three main products: RISE, which is an installment loan that is available in 17 states (up from 15 at the time of the IPO), Elastic, which is a revolving credit product available in 40 states, and Sunny, which is an installment loan for the UK market. Recently, the company posted its third-quarter earnings. While the stock sold off, it remains well above its IPO price, at around $7.20 per share, and I think the near-term pessimism could mean long-term opportunity. Here's why.
Source: Fool.com
