SoFi Technologies (NASDAQ:SOFI) has been riding quite the wave over the second half of 2024, with its share price more than doubling over the past three months.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Investor enthusiasm stems from multiple factors, most notably the fintech firm’s impressive Q3 results released in late October. SoFi reported revenue growth across all three of its core strategic segments and raised its full-year guidance.
Adding to the bullish sentiment is the anticipated shift in U.S. leadership. Market participants foresee a more business-friendly regulatory environment and potential corporate tax relief under the incoming Trump administration.
Naturally, when a stock enjoys such a meteoric rise, questions about its valuation come to the fore. Is now the moment for SoFi investors to lock in gains?
Not if you ask top investor Danil Sereda, who believes there’s still ample opportunity for further upside.
“The ongoing rally still has room to run, and the stock is likely to continue its upward trajectory in the medium term,” writes the 5-star investor, who sits in the top 4% of TipRanks’ stock pros.
Supporting his optimism, Sereda highlights SoFi’s robust membership growth, which surged 35% year-over-year in the past quarter to nearly 9.4 million customers. This expansion isn’t solely driven by new members. A substantial portion of new product uptake – about one-third – comes from long-time users.
Sereda also cites SoFi’s 17th quarter in a row of increasing revenues, which are being fueled by growth in all three of the company’s segments of financial services, technology platforms, and loan origination. The investor is particularly bullish regarding SoFi’s financial services unit, which grew by 102% year-over-year and now contributes more than a third of the company’s total revenues.
A notable chunk of these financial service gains came from SoFi’s Loan Platform Business, which originates loans for third parties. As Sereda explains, this “allows SoFi to scale its business without incurring additional balance sheet risk.”
Going forward, Sereda posits that SoFi’s burgeoning membership, high-quality borrowers (average FICO scores of 746 for personal loans), and success in cross-selling its many offerings, among other positives, should fuel long-term growth.
Sereda concludes that SoFi is “still looking like a ‘steal’ for growth investors,” and therefore rates the stock a Buy. (To watch Sereda’s track record, click here)
The investor’s optimism is not fully reflected on Wall Street, however. With 5 Buy, 6 Hold, and 3 Sell recommendations, SoFi claims a Hold (i.e. Neutral) consensus rating. Its 12-month average price target of $11.46 implies losses of almost 30% from current levels. (See SOFI stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
