Following recent profit reports two brokers have issued research notes on junior fintech companies they think will outperform.
One of the benefits of being small in relative terms is that the potential share pirce upside can be large.
Let's see who the brokers like.
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Beforepay Group Ltd (ASX: B4P)
Shaw and Partners has issued a new research note on Beforepay with a bullish share price target, based on their estimate that the company will be able to grow its earnings per share by 164% this financial year.
Beforepay allows people to get advances on their pay, as well as offering small personal loans.
The company recently reported net profit of $15.7 million, up 57% and "rapid" growth in personal loans.
Total cash advances were up 19% on the previous year to $963 million, mainly driven by an increase in the size of advances to an average of $456.
The company's personal loans business grew by 728% during the year to $16.9 million.
Beforepay Chief Executive Officer Jamie Twiss said:
FY26 was an outstanding year for Beforepay, delivering record Cash NPAT of $15.7 million, up 57%, while continuing to grow strongly across the business. We're particularly excited by the rapid growth of Personal Loans, which scaled significantly during the year, and the opportunities ahead as we realise the benefits of interest on Pay Advances and our new, lower-cost debt facility. We enter FY27 with real momentum and are incredibly excited about the next phase of Beforepay's growth.
Shaw and Partners said Beforepay was currently trading at a steep discount to its peers in the small cap financial sector.
The broker has a price target of $2.90 on Beforepay shares compared to $1.80 currently.
Credit Clear Ltd (ASX: CCR)
Broker Morgans said Credit Clear's recent profit report was a "standout result", with organic revenue growth of 9% complemented by strong contributions from two acquisitions.
Revenue of $60 million, up 28% year on year, exceeded guidance, and underlying EBITDA of $10.4 million, up 41% year on year, was also strong.
Morgans said:
CCR has driven growth and scale to become a key player in the domestic contingent collections market. We see CCR as well positioned to continue to consolidate its position in ANZ and the much larger UK market, organically and via M&A in the coming years. We derive a $0.30/sh price target, which informs our Speculative Buy recommendation.
Credit Clear shares are currently changing hands for 17 cents.
