SoFi has commanded a premium valuation for years that it didn't necessarily deserve. Book value per share is growing again.
The financial services industry has been around for hundreds of years. Legacy institutions, burdened by bureaucracy and outdated technology, often fail to meet the evolving needs of today's consumers.
The digital bank is adding services and hundreds of thousands of members. This is leading to increased scale and profit.
SoFi Technologies (SOFI) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
SoFi's technology platform is growing quickly, but what is it?
It isn't common for Wall Street to take a second look at beaten-down stocks, as analysts would risk not only their reputations but also their jobs if they dared boost ratings on a stock with bearish momentum attached to it. Today, some investors with the need for a thrill may want to look into shares of SoFi Technologies Inc. NASDAQ: SOFI, which are trading down to only 55% of their 52-week high prices.
The stock has rarely dipped this low over the past several months, and the last time SOFI fell below $7 per share, there was a massive rally towards the $10. Recent developments show that the company's fundamentals keep improving as it continues demonstrating strong revenue growth and profitability expansion. The market highly likely underestimates SOFI's revenue growth potential as consensus revenue growth estimates are notably lower than the management's expected 25% revenue CAGR over the next three years.
The banking disruptor is at a 52-week low. Here are the arguments for and against it.
SoFi Technologies, Inc. (SOFI) closed at $6.45 in the latest trading session, marking a -1.38% move from the prior day.
SoFi shares have slumped significantly since 2021 peak, but recent financial improvements suggest a potential turnaround. Despite market concerns over loan defaults, SoFi's strong financial performance and high-quality borrower base indicate upside potential. Insider buying, promising forward growth projections, and undervaluation relative to growth prospects support my strong buy rating on SoFi.
SoFi is growing rapidly and has tons of potential to add innovative new products. Defaults are a bit on the high side and should be closely watched.
Despite its incredible progress so far, SoFi has several potential growth drivers. Credit cards are a particularly interesting opportunity for the innovative banking disruptor.