SoFi Technologies (NASDAQ:SOFI) stock is a play on the future of finance.
Finance plays a crucial role in our lives. After going through the lockup expiry and reporting uneventful earnings, SOFI stock has shown high volatility.
The stock hasn’t gone anywhere from the $14 level since last month, only recently passing through the $16 resistence it struggled with. But this could be when SoFi stock starts its breakout.
I believe SoFi has the potential to transform the Fintech industry and it also enjoys an early-mover advantage. SOFI stock is a hidden gem to add to your portfolio.
I believe the worst is behind the company. Even if it is struggling today, there is ample upside in the near future. The decline in the stock after earnings is common and is temporary. The fundamentals of the company are strong and it enjoys a stronghold in the market.
Gone are the days when banks held all our money. There is no longer the need to have different accounts across different banks and use several apps for budgeting, borrowing, financing, and managing investments.
Sofi is a one-stop shop that is ideal for users today. Most importantly, Sofi caters to the needs of the customers. It not only focuses on expanding product offerings but also works towards building a strong reputation for the customers’ needs.
It has successfully managed to do so and the growth in user base is proof. In the second quarter, the users doubled to 2.6 million. This is no small feat.
A Closer Look at SoFi Stock
As per the investor presentation, Sofi Technologies expects the adjusted EBITDA in 2022 to be around $254 million without the national bank charter and EBITDA at $447 million with a national bank charter.
The company has three segments- lending, financial services, and technology. Investors are concerned about the lending business due to the loan refinancing, which is a huge part of the overall business.
The student loan relief will expire in January 2022 and this is an event to watch out for. This segment of the business will pick up in 2022.
The company is constantly working on expanding its offerings and lending capabilities. It is certainly doing something right in the industry to be able to attract massive users over time.
Once Sofi receives the full approval for a national bank charter, the company’s lending platform should improve and generate high revenues.
The Bottom Line on SoFi
SOFI stock has seen a significant decline over the past few months but it is on the mend. The pullback is a reaction to the lockup expiry and the stock will pick up in the next few months.
There is a lot working in favor of the company and the strong fundamentals are a reason enough to bet on it.
Sofi Technologies aims to become a household name with its products and has constantly improved the product offering and services on the platform.
The stock is young and there is a long way to go. The sooner you put your money on it, the higher you’ll earn.
Fundamentals are important and so is growth, SOFI stock looks promising on both fronts.
The stock could transform the FinTech industry and reap strong returns in the coming years. The current dip is a good entry point.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.