A good number of small cap shares have been hit hard this week. None more so than growing fintech company Class Ltd (ASX: CL1) which suffered a 6% drop on Thursday.

This drop means its shares have now plummeted by approximately 20% since it released a strong quarterly update at the start of October. Does this mean the fintech star is dirt cheap now?

Trading at 46x estimated FY 2017’s earnings may not sound cheap, but let’s not forget this is a company growing earnings at an incredible rate.

In FY 2016 the self-managed super fund (SMSF) software provider delivered a 71% increase in net profit after tax to $5.8 million. This was the result of a 45% increase in total revenue driven primarily by an increase in the number of billable portfolios, which grew by a record 30,618 in the 12 months ending 30 June 2016.

Pleasingly in the last quarter Class announced a further increase of 12,030 new clients to a total of 124,471 billable portfolios. This strong result was driven by the faster-than-expected addition of SMSFs from wealth accounting company Findex.

Back in May, Findex signed up over 8,000 SMSFs with the plan to load them onto Class over a two-year period. But here we are six months later and nearly all of its SMSFs are on Class.

It is worth noting though that as a result of Findex loading its SMSFs ahead of schedule, it will receive an implementation incentive that will see revenue from some of these funds discounted through to June 2017. This is likely to impact revenue slightly, but isn’t anything to worry about.

One thing in particular that I like about Class is that not only is it good at winning business. It is also very good at retaining it.

Excluding the loss of AMP Limited (ASX: AMP) as a client, Class is enjoying a retention rate of 99.8%. Incidentally, the reason that AMP is leaving is due to it acquiring its own SMSF platform.

I believe that the quicker-than-expected loading of Findex’s SMSFs and the company’s strong retention rate is a testament to the quality of the award-winning Class product.

This bodes well for the future in my opinion, especially with the seismic shift from desktop to cloud-based SMSF software well underway. Desktop SMSF admin software is still the most popular choice with 71.8% of the market. But this is quickly changing and has fallen from being 88.8% of the market in 2013.

A recent survey the company conducted with over 1,000 accountants revealed that 23% plan to move to cloud-based software imminently. As this transition takes place I expect Class to benefit greatly.

So overall thanks to its long-term growth potential, I believe at the current price this growing fintech company would be a great buy and hold investment.

If you need to make space in your portfolio fro Class then selling these rotten ASX shares before they destroy your wealth could be the way forward. Are they in your portfolio?

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Class Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.