Is SOFI stock a good buy in Q2 2024?

michaelzakkovision
May 21, 2024
3 min read

Updated: May 22, 2024

Publication date: 21.05.2024

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SoFi Technologies, Inc., a notable player in the fintech arena, offers a diverse range of financial services. As we delve into the second quarter of 2024, investors are keenly watching SOFI's stock. This analysis aims to explore whether SOFI represents a sound investment opportunity at this juncture.

Business Overview

SoFi Technologies Inc. is a digital finance company that began in 2011 by Stanford students aiming to revolutionize student loans with tech-driven, personalized solutions. Quickly expanding beyond student loan refinancing, SoFi now offers a wide array of products including Online Banking, Loans, Invest, Insurance, Credit Card, & Mortgages.

Latest news

The company became publicly traded in 2021, and as of late 2022, is largely held by institutional investors, with Vanguard Group and BlackRock among the largest. In 2023, SoFi was recognized as one of the World's Most Innovative Companies and a Top Fintech Company

Performance Zoom in

SoFi's stock has demonstrated notable short-term growth with positive weekly, monthly, and six-month increases, contributing to a significant one-year gain of 42.74%. This trend suggests sustained positive momentum but still a downtrend. Despite this rise, the stock may still be undervalued. After reaching a high of $28.26 on February 1, 2021, it subsequently fell to a low of $4.24 on December 7, 2022, and is currently priced at around $7. Additionally, the stock has experienced a decline of 24.97% year-to-date, and over a five-year period, it has declined by 33.77%. These figures highlight both ongoing challenges and the potential for recovery amid persistent volatility.

Performance Zoom Out

Financially, SoFi has a market capitalization of $7.70 billion USD and annual revenues of $2.91 billion USD. However, the company faces challenges, evidenced by a net loss of $300.74 million USD for the fiscal year and a negative basic EPS of -$0.23. Without dividends and an unavailable price-to-earnings ratio due to negative earnings, SoFi's stock exhibits high volatility with a beta of 2.75 and a substantial shares float of 986.64 million. These figures underscore a dynamic company in a robust growth phase, managing significant revenue alongside sizable losses.

Swot analysis.

SoFi stands out in the financial industry with a versatile product lineup including student loan refinancing, personal loans, and more, supported by significant funding from entities like SoftBank. Strategic acquisitions like Galileo and Technisys enhance its technological edge, while a national bank charter elevates its financial stability. Despite these strengths, SoFi grapples with regulatory challenges and leadership instability that could undermine trust and direction. Opportunities for expansion through digital services and international markets are promising, yet SoFi must navigate intense competition, regulatory shifts, and economic vulnerabilities to sustain its growth and market position.

Conclusion

Investing in SOFI stock in Q2 2024 could be considered if you are willing to accept potential risks for higher rewards. The stock might appeal to investors who are optimistic about SoFi's growth trajectory and believe in its strategic initiatives, especially in tech-driven financial services. However, given the financial losses and market volatility, investors must consider their risk tolerance and investment horizon.

SOFI stock is available for trading on etoro.