So Block used to be the darling of growth stock investors, but it's had a rough couple of years—lost momentum, got expensive, and people stopped caring. Recently it's been making a comeback, but honestly, if you're really into fintech plays, there are two companies I think are way more interesting right now: StoneCo and Bill Holdings.

Let me start with StoneCo. This Brazilian fintech company is actually held by Berkshire Hathaway, which is kind of interesting because it's not your typical Buffett stock—it's a pure growth play that's been burning cash. But the turnaround story here is legit. The stock jumped 91% not too long ago, and when you dig into the numbers, you see why. Their revenue grew 25% in Q3 2023 compared to the year before, active payment clients were up 42%, and get this—adjusted net income surged over 300% with margins hitting 13.9%. That's a massive swing.

StoneCo does basically what Block's Square does—sells hardware and software to small businesses. But they've expanded way beyond that. They offer banking products, credit lines, and they're now going after medium and large businesses too. The company went through some rough patches—grew too fast, lost focus, had regulatory headaches, and churned through management. But the new CEO has been there almost a year and is actually executing. They're optimizing the platform and moving upmarket, which is driving better engagement and profitability. Customers who use the platform more are also more profitable, and that's the model they're betting on. The stock trades at a price-to-free cash flow of around 20, which feels cheap for what they're building. It's not for the risk-averse, but there's serious upside if they keep executing.

Then there's Bill. This company built a back-end platform that basically automates accounting and payments for businesses. Any small to medium-sized company would benefit from this—the software pays for itself by freeing up expensive labor. They've got over 470,000 paying clients, which gives them solid recurring revenue. But they also make money from 5.8 million network members who pay processing fees. Revenue jumped 65% in their fiscal 2023, though it's slowed to 33% growth in Q1 2024—which makes sense given the economic pressure businesses are facing.

What's encouraging is that Bill is managing expenses well. Gross margins expanded from 80.4% to 81.6%, and their net losses are shrinking while expense growth has stabilized. Management has a clear roadmap: recruit more members, get higher engagement, expand into new regions. The stock got hammered in 2023, down 25%, and right now it's trading at a price-to-free cash flow ratio of 43—basically the cheapest it's ever been. Once inflation keeps cooling and companies loosen their purse strings, this could really run.

According to analysts like Jennifer Saibil and other market observers covering fintech, both of these companies have compelling long-term narratives. StoneCo's international expansion and profitability pivot, plus Bill's sticky recurring revenue model, give them different but equally interesting paths forward. Neither is a slam dunk, but if you believe in fintech as a sector, these are worth a serious look right now.