It’s baffling that app-based bank SoFi Technologies (NASDAQ:SOFI) isn’t heavily favored on Wall Street. The company is poised to transform the personal finance market as we know it. Yet, SOFI stock is surprisingly cheap — which can be viewed as an opportunity for enterprising investors.
This isn’t to suggest that SoFi Technologies doesn’t have any believers in the financial community. Mizuho analyst Dan Dolev issued a “buy” rating on SoFi shares, and Soros Fund Management founder George Soros was, and may still be, among SoFi Technologies’ investors.
So, if you truly believe in “buy low and sell high,” SOFI stock ought to be on your radar right now. If my bullish thesis is correct, SoFi’s investors will enjoy strong gains in the near future, leaving the latecomers to buy at significantly higher prices.
Superior Services Should Catalyze SOFI Stock
Time and again, SoFi Technologies has demonstrated its innovative spirit with disruptive products and services. At the same time, the company is just as legitimate as any traditional bank, especially since SoFi earned a banking charter last year.
What caused SOFI stock to drop during the past year, then? The company hasn’t done anything terrible to deserve this. Rather, it was primarily a confluence of events that should be resolved at some point: elevated inflation, multiple interest-rate hikes and widespread fear of a recession.
SoFi Technologies can’t be blamed for these external factors, of course. Meanwhile, SoFi has been developing highly useful product/service offerings to its customers. One example is SoFi Plus, which offers high yields on banking balances, 3% cash back on purchases and substantial rewards points on qualifying activity.
SoFi Technologies: A Future-Facing Fintech Firm With an AI Angle
Besides SoFi Plus, there are other notable services that SoFi Technologies offers. One of them is called Vaults. It enables “members to earmark their money for a variety of specific goals while earning interest.” Additionally, SoFi offers a Roundups service. This “allows members to roundup purchases on their debit card to the next whole dollar amount and deposit into savings.”
If millennials and zoomers prefer flexible, tech-enhanced personal finance products, then it’s easy to see why many of them will choose SoFi over old-fashioned banks. SoFi Technologies’ user-friendly app and rock-bottom fee schedule should help the platform attract more customers.
Plus, there’s an artificial intelligence (AI) angle to consider. Muslim Farooque pointed out that SoFi Technologies “uses AI to effectively transform the lending process.” Moreover, SoFi achieves this by “offering customers lower rates and more savings potential.”
Farooque’s point is underappreciated by today’s investors. SoFi Technologies has, as Farooque explained, utilizing customer data and machine learning technology to develop a “robust underwriting model.” It’s yet another reason why SoFi represents the future of banking, while traditional lenders could get left behind.
What You Can Do Now
SoFi Technologies provides next-generation, tech-enabled personal finance products and makes banking simple and convenient. At the same time, having a banking charter makes SoFi a legitimate contender among financial institutions.
It seems like the market doesn’t appreciate SoFi Technologies’ distinct advantages. Besides, the external factors that caused investors to feel anxious about SoFi, weren’t the company’s fault and won’t last forever. Therefore, it makes sense to take a position in SOFI stock today, in anticipation of a share-price pop that could happen at any moment.
On the date of publication, David Moadel 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.
