Baird Analysts’ Top Picks
Baird analysts have handpicked seven stocks within the financial technology, payments, and services subsector that they are particularly bullish on as we head into the first quarter earnings season.
- Global Payments Inc. (GPN) – Analysts anticipate that this quarter’s revenue/EPS will meet or exceed consensus expectations. The stock is trading at around 10 times the next twelve-month P/E and is seen as having an “accelerating EPS growth path, coupled with leverage and add-backs coming down.” Analysts also forecast a potential upward revision in 2024 guidance.
- AvidXchange Holdings Inc. (AVDX) – Analysts are looking for a 2-3% revenue beat, with possible EPS upside. The company is expected to maintain a solid quality of earnings, with core revenue likely to pick up pace in the upcoming quarters driven by robust sales and new products like Payment Accelerator.
- Toast Inc. (TOST) – Expectations are high for Toast Inc., with analysts predicting outperformance in gross payment volume, yield, and adjusted EBITDA figures. The company has shown impressive growth rates in critical metrics, reinforcing its position in the industry.
- WEX Inc. (WEX) – Analysts are bullish on WEX Inc., projecting a substantial revenue/EPS beat driven by core operations and fuel prices. Despite its solid performance, the stock is valued attractively at 13 times 2025 EPS, making it an intriguing proposition within the fintech landscape.
- Corpay Inc. (CPAY) – Baird analysts are optimistic about Corpay Inc., noting flat year-over-year sales expenses in the first half of 2023 and potential improvement in bad debt expenses. The company’s financials indicate room for enhanced operational efficiency and significant cash flow availability for buybacks.
- WNS Holdings Ltd. (WNS) – Analysts highlight WNS Holdings Ltd.’s transition to ordinary shares on the NYSE and commend its robust growth trajectory in information technology outsourcing and business process outsourcing. Despite facing valuation pressure, the company is poised for steady revenue growth and holds a strong balance sheet.
- Thoughtworks Holdings Inc. (TWKS) – With a perspective that consulting is cyclical, analysts see Thoughtworks Holdings Inc. as a promising candidate, especially given its low valuation relative to revenue expectations.
