2 Uncommon Tech Stocks to Buy in 2022

When it comes to technology stocks, big companies like apple And Amazon tend to attract attention. Because of attractive products and exposure to consumer space, one can understand this focus.

However, this interest may come at the expense of lesser known tech stocks that are not directly focused on the American consumer. Investors looking for such companies should consider taking a close look at technology growth stocks such as Stunko (STNE 1.03%) And upstart holding (UPST -56.42%).

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1. StoneCo

As a company that only operates in Brazil, StoneCo is not a well known company to US investors. It’s also possible that these investors don’t know that Brazil’s central bank has enacted policies that make its country the center of Latin American fintech, a sector that must serve a large population that often lacks bank accounts and credit cards. Thus, fintech companies such as StoneCo have attracted interest prior to Warren Buffett’s initial public offering. Berkshire Hathaway.

Buffett’s team may have preferred this stock because it built an ecosystem similar to to forbidSquare Ecosystem in the Developed World. Provides companies with IT infrastructure to handle financial and technical management needs. Since Brazilian fintech companies can lend money without a bank, they can provide capital more efficiently.

StoneCo also stands out with its customer service. It takes a “no bureaucracy” approach to customer service and can quickly deploy employees when needed. This allows its representatives to solve problems in a quick and personal way.

However, pandemic-related restrictions, rising inflation, and increased reserve requirements have taken their toll on this stock that was soaring in 2019. Over the past 12 months, it has fallen by about 85%.

However, activity continues to increase. The total volume of payments increased by 31% during 2021 to more than 275 billion riyals ($ 54.6 billion). This volume led to 4.8 billion riyals ($950 million) in revenue, an increase of 45%. Unfortunately, as all expense categories rose faster than revenue, adjusted net income fell 79% year-on-year to just OMR203 million ($41 million).

However, the lockdown restrictions have worn off, and tech stocks appear to have fueled inflation fears. Moreover, the price-to-sales (P/S) ratio fell below four, near record lows for the stock. Hence, StoneCo appears on the right track for more fintech in Brazil while offering investors a significantly discounted purchase price.

2. cocky

Upstart offers a loan assessment tool. Uses Artificial Intelligence (AI) to evaluate loan applications, and compete directly with them Isaac Company ExhibitionFICO result. It originally started with personal loans but has since expanded into auto lending. It also plans to evaluate prospective mortgages and business loans as soon as next year.

Upstart earns money by collecting fees for evaluations. This leaves her with no immediate loan risk. However, bad loan decisions can have serious consequences. The majority of its loan volume comes from New Jersey-based Cross River Bank, and it could become vulnerable if its relationship with Cross River soured. Moreover, the model did not face the test of a high interest rate environment, and Fair Isaac could add artificial intelligence functions to improve its model.

However, an upstart accepts 70% of the loans immediately. Additionally, the Consumer Financial Protection Bureau said its model approved 27% more loans than competing models, including twice as many consumers with FICO scores between 620 and 660.

The model seems to be attracting more and more noteworthy attention. In 2021, Upstart reported $849 million in revenue, a 264% increase over last year’s levels. That allowed the company to earn $224 million in adjusted net income, up from $17.5 million in 2020. This profitability is very unusual for a technology stock that is growing. And in 2022, if the company’s expectations hold, Upstart will generate revenue of about $1.4 billion, about 65% above 2021 levels.

Despite the rapid growth, Upstart is down nearly 80% from its 52-week high. But its P/E ratio of 59 is near record lows, and if it can handle a high rate environment, its expansion into new markets and rapid revenue growth can deliver significant returns.

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