So I was digging through some fintech plays the other day and realized a lot of people are still sleeping on some solid alternatives in this space. Everyone's been focused on Block, but honestly there are two other companies that caught my attention way more.

First up is StoneCo. This Brazilian fintech has been on quite the journey. A few years back it was growing like crazy but kind of lost its way with some management chaos and regulatory headwinds. But here's the thing - they brought in a new CEO almost a year ago and the turnaround story is actually looking legit now. Their Q3 2023 numbers showed revenue jumping 25% year-over-year, and their active payments client base grew 42%. Even wilder, adjusted net income was up over 300% with margins hitting 13.9%. The stock itself gained 91% that year. They're basically doing what Block does with Square, selling hardware and software to small businesses, but they've expanded into banking and credit products too. Now they're targeting medium and large businesses which is driving better engagement and profitability. The valuation is interesting too - trading at roughly 20x free cash flow which seems pretty reasonable for what they're building.

Then there's Bill Holdings. This one operates the backend automation for accounting and payments that pretty much every small to medium business needs. They've got over 470,000 paying clients which gives them solid recurring revenue, but they also make money from their 5.8 million network members through processing fees. Revenue grew 65% in their 2023 fiscal year but has moderated to 33% growth in early 2024 as companies tighten spending. What's encouraging is their gross margins expanded to 81.6% and they're managing expenses well. They're still unprofitable but the losses are shrinking. The stock got hammered 25% in 2023 but now trades at around 43x free cash flow - basically the cheapest valuation they've had. If the economy loosens up and companies start spending again, this could run.

Both of these have interesting risk-reward setups if you're looking at fintech. Jennifer Saibil and other analysts have highlighted these as names worth watching in the space, though obviously do your own research. The point is there's more opportunity out there than just the obvious plays everyone talks about.