2024-06-20 15:44:47 ET
Summary
- We saw a notable 35.5% YTD drop in SoFi's stock and the continuation of weak performance following the Q1 FY2024 earnings report. But I remain bullish.
- I believe the stock decline was primarily due to short-term guidance falling below analyst expectations, not fundamental issues within the company.
- SoFi's Lending segment faced slight revenue declines due to conservative strategies, but loan volumes grew significantly. Also, the Technology Platform and Financial Services segments performed exceptionally well.
- Based on my calculations, SOFI stock should expand at a CAGR of around 21% for the next 5 years.
- Despite the existing risks, I urge my readers to ignore the market's pessimism and buy SOFI for the long term.
Intro & Thesis
I initiated coverage of SoFi Technologies, Inc. ( SOFI ) in January 2024 with a "Buy" rating, highlighting the company's long-term growth potential through the synergistic effect of combining traditional finance and banking activities with fintech innovation. Since my initial bullish thesis, the stock is up more than 17%, half the gain of the S&P 500 ( SP500 ) ( SPX ) over the same period (amid a higher volatility due to a significant beta). Also, since my latest updates the stock has shown rather negative dynamics, so my bullish calls regarding SOFI can hardly be called successful so far:
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For further details see:
SoFi: Ignore The Market's Pessimism