SOFI - SoFi Technologies: Poised For Long-Term Profitability

2024-02-19 19:32:12 ET

Summary

• SoFi Technologies is positioned for strong performance in personal lending and refinancing student debt, with robust deposit inflows supporting loan retention.
• The company's Q4 results provided optimism for GAAP profitability and exceeded earnings expectations, with forecasted revenue growth and earnings per share beating market forecasts.
• SoFi's investments in the neobanking segment and technology platform business present significant long-term opportunities for the company, with a goal of becoming the Amazon Web Services of fintech.

Thesis

Back in May last year, I covered SoFi Technologies, Inc. ( SOFI ), where I discussed the company’s strong range of products but assigned a hold rating to the stock due to the FED’s hiking cycle, which I believed posed a risk to the company’s loan portfolio. However, SOFI has continued to do well, and the stock is up 67% since my article. The company has continued to post strong result and has been able to grow its deposit base & benefiting from lower cost of funding, resulting in higher-than-expected profitability. I have revised my rating on the stock to a buy as I believe despite the run-up in the stock price, there is still a lot of room for SOFI to grow....

For further details see: