Fintech company SoFi Technologies (NASDAQ:SOFI) has shown a consistent drop and it is not surprising. Several stocks are falling in the past few months driven by the Russia invasion on Ukraine and the growing concerns around inflation. Despite showing tremendous growth in various segments, SOFI stock is being punished. The company is making strong moves to maintain its position in the industry and the current dip is only temporary.
SOFI stock went as high as $24 in November 2021, but has been declining since then. It is down 38.5% year-to-date and is currently trading at $9.74. I see strong potential in the stock and believe it will revisit the all-time high of $24 soon. There are several catalysts working in favor of the company and it could have a solid year ahead. With that in mind, let’s consider the catalysts that will push SOFI stock higher.
Galileo Is Growing
Sofi Technologies has different segments and lending is one of its largest ones. However, the future of finance is changing and the acquisition of Galileo will prove to be a solid deal for Sofi. The merger between the two companies has created a moat that will help serve some of the top financial clients in the sector. It will give Sofi an upper hand in the industry as it continues to expand across the sector.
The company has already announced the expansion of Galileo in Colombia. Having entered Mexico in 2020, Galileo has established itself as a leader of fintech and has already onboarded more than 1 million end-user accounts in the area.
Galileo can outperform the lending sector of the company with its consistent account growth since 2019. The company serves some of the top fintech in Mexico and Colombia. Therefore, this expansion will have a solid impact on the bottom line.
Impressive Bottom-Line Growth
SoFi has reported stellar fourth-quarter results which pushed SOFI stock higher, but only for a short period. The company reported record growth in products and new members in the fourth quarter.
That said, the fourth-quarter revenue was up 67% and it reported a positive earnings before interest, taxes, depreciation, and amortization (EBITDA) of $5 million for the sixth quarter straight. Its financial services products have also shown impressive growth of 155% year-over-year.
This is only the beginning for SoFi. It has the potential and the opportunity to change the future of fintech.
To cash in on the growing cryptocurrency craze, SoFi announced that members will now be able to invest part of their direct deposit in cryptocurrency at no fees. It will encourage members to set aside an amount to begin their crypto investment journey. Further, members can also set a recurring purchase of a crypto asset of their choice. This feature is now live for all the members and it will attract novice crypto investors to the platform.
The Bottom Line on SOFI Stock
The current economic situation could impact the future of the stock. However, considering these catalysts, now is not a good time to write off SOFI stock. It is in a growth stage and the financial industry is rapidly changing, which means there is a solid chance for SoFi to soar.
SoFi Chief Executive Officer Anthony Noto purchased $750,000 worth of shares since the beginning of March.
The company has successfully transformed the fintech industry by offering consumers a one-stop shop for all things finance. This has certainly worked in favor of the company and the fundamentals are proof that it is moving in the right direction. It is time to take your position in SOFI stock.
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.
