SoFi Technologies (NASDAQ:SOFI) stock presents a compelling buying opportunity for investors seeking upside in 2024. The company has several catalysts for investors to hone in on, including the resumption of student loan payments and continued ecosystem growth with the company’s expanding portfolio of products. Improved deposits in the third quarter, reaching $15.7 billion, highlight consumer trust in SoFi over traditional banks.
SoFi’s all-in-one platform consistently draws new users, adding over 7 million in Q3 for the tenth straight record revenue quarter. With potential profitability ahead and sustained user growth, it’s poised as a fintech disruptor. Cathie Wood holds 1.7 million SOFI shares, signaling confidence. Priced at $8.31, it’s positioned for potential 2024 doubling, making it an attractive sub-$10 buy for those seeking significant gains.
A Fresh Look in Banking
SoFi, initially focused on student loans, has evolved into a digital app offering a range of youth-friendly financial services. Acquiring a banking charter in 2022 strategically positioned SoFi, buffering it from loan challenges and fostering increased engagement amid rising interest rates.
In Q3 2023, SoFi reported strong lending with a 48% year-over-year increase in loan originations and a 90% rise in net interest income. Non-lending segments contributed 67% to revenue growth, resulting in profitability. Overall revenue increased by 27%. The company achieved a record $98 million in adjusted EBITDA, reflecting a 121% year-over-year increase.
Despite a $0.03 net loss per share (excluding a one-time impairment charge), management anticipates positive net income in Q4. SoFi’s strategy, aiming for member engagement and product utilization, added 717,000 new members and over 1 million new product sign-ups in Q3 2023.
Plenty of Growth on the Horizon
This strategy shields SoFi from challenges, especially in a high-interest-rate environment where lending faces pressure. The rollout of banking services and financial solutions on its app positions SoFi well for future uncertainties.
It is also contributing to a growing and more profitable business, but the expected net income for 2024 remains uncertain. If SoFi achieves a net profit in Q4, the stock may see a temporary boost, but sustained performance hinges on various factors. Potential interest rate cuts by the Federal Reserve would benefit SoFi’s growth, and its demonstrated profitability at scale is promising.
While expecting a stock to double in consecutive years is optimistic, SoFi could perform well in 2024 if plans align successfully.
Buy SOFI Stock Now
SoFi may achieve positive GAAP earnings in Q4 2023. In 2024, organic growth through increased membership and cross-selling may counteract rate cut concerns. The potential for above-average revenue and outsized earnings growth could lead to a bullish outlook, aiming for levels last seen in 2021. If you’re optimistic about the fintech sector, consider buying SOFI stock after recent weakness.
On the date of publication, Chris MacDonald 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.
