SoFi Technologies (NASDAQ:SOFI) was founded as a student loan refinancing business. Over the past decade, it has become one of the top fintech players. SOFI stock has been down this year, but it has strong growth prospects. The company enjoys an early-mover advantage in offering a one-stop solution for complete digital financial services.
Interestingly, the company has reported positive adjusted EBITDA for the past four consecutive quarters. Investors are more concerned about the growth in user base and SoFi has had an impressive run. In the second quarter, its membership more than doubled compared to the same period last year.
SOFI stock is down 50% from its highs and is trading around $15 today. The stock is an ideal long-term buy. Let’s dig deeper into the tailwinds for SOFI stock.
SoFi Is a One-Stop Shop for Users
SoFi offers users an opportunity to manage their finances from a single app. It continues to roll out different functions on the app that makes handling finances easier. You can save, spend, invest and borrow money on the platform.
This is what attracts users to the fintech company. There is no need to have different apps on your phone to manage your finances. It is an ideal platform that matches the digital lifestyle many people have in 2021. It offers something for every user’s needs.
Despite losing money on student loan financing, SoFi’s other products look well-established in the industry. Its Galileo platform caters to other businesses in the industry and has seen significant growth in its accounts. It has reported an increase of more than 100% year-over-year (YOY) in the last four quarters — and this is only the beginning.
Users are satisfied with the products and services offered by SoFi. The company rose from 704,000 members in 2019 to a whopping 2.6 million users at the end of Q2 in 2021. This is proof that the company is offering products and services that meet the changing demands of customers.
SoFi’s products have shown 123% YOY growth. If a company is not confident about user growth, it will not invest in products. But SoFi understands the market and believes it can lead the way into the future of fintech. It offers products and services that most customers will find useful for borrowing, lending or investing.
SOFI Stock and Strategic Acquisitions
SoFi is leaving no stone unturned to cement its position in the industry. The company made two major acquisitions over the past two years.
Its first notable purchase was Galileo Financial, which it acquired for $1.2 billion. Galileo is a platform that allows other businesses to join and offer services to their customers. Its growth has been impressive, with more than 79 million customer accounts.
Another acquisition SoFi made was Golden Pacific Bancorp, which will help the company get the national bank charter it has been eyeing for a while. The charter will allow SoFi to make its own loans in the future.
This acquisition is a key step in expanding its presence in the market. Once the company gets the national bank charter, the sky is the limit.
SoFi looks happy with its products at this point, as they address its business needs. The company will have to continue updating to reflect the changing needs of its users, but that shouldn’t be a problem — it certainly has the ability to do just that.
The Bottom Line On SOFI Stock
Fundamentally, SoFi looks well-positioned in the industry and has the ability to become one of the top fintech players. It also has strong guidance for the next quarter and I believe the company can meet its projections. Additionally, its Galileo platform looks promising and could drive growth in the short term.
SOFI stock is trading at a discount today, and this is an opportunity to add it to your portfolio. The stock has the potential to more than double in the coming years.
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.