Digital banking is growing, and SoFi is poised to benefit.
SoFi Technologies (SOFI 3.69%) was riding high last year as a business, demonstrating incredible growth despite elevated interest rates that were sinking many banks' stocks. Management confidently promised that it would report a net profit in the fourth quarter, and it came through on that promise.
But after more than doubling in 2023, SoFi stock saw a partial sell-off after recently reporting another excellent, much-anticipated quarterly report. The stock remains down 26% so far in 2024. Are investors missing something?
Invest in the future of banking
SoFi started as a student loan cooperative, but it now offers a complete suite of financial services on its all-digital banking operation. Its app interface offers bank accounts, investing tools, and more.
This business model accomplishes several things for SoFi. It kept the company solvent through the pandemic-related student loan pause, since SoFi could rely on several alternative revenue-generating segments. It encouraged customers to adopt more products, leading to higher revenue per user and lower servicing costs. It helped SoFi scale up to the point where it could profit on its services. It is also helping SoFi lay the groundwork for success as digital users increase.
As more and more banking is going online, SoFi is well-positioned to benefit. It's setting itself up now for success in the near term, but even more so in the long term. According to Statista, digital banking users will keep increasing over the next two years, and that trend is likely to continue for many years.
Image source: Statista. Note: Data is from a report released in March 2021. All figures except for the 2021 figure are estimates.
Most banks offer digital banking these days, but SoFi is a new breed of all-digital banks that offer low fees and high savings rates. It's geared toward millennial and Gen-Z users who are drawn to its simple and easy-to-use interface. This younger cohort will grow along with SoFi and provide years of revenue and profit generation.
Smart investors prepare for the long term. SoFi is an incredible deal at the current price, sporting a price-to-sales ratio of 3, and this is an excellent opportunity to buy shares on the dip.
Jennifer Saibil has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
FAQs
SOFI Stock 12 Month Forecast
Based on 16 Wall Street analysts offering 12 month price targets for SoFi Technologies in the last 3 months. The average price target is $8.91 with a high forecast of $14.00 and a low forecast of $3.00. The average price target represents a 22.05% change from the last price of $7.30.
Is SoFi Bank stock a buy? ›
SoFi Technologies
Banks come with unfavorable characteristics, but SoFi is bucking the trend. SoFi Technologies (SOFI 3.69%) hasn't fully benefited from the favorable market environment that's seeing some stocks hit fresh records. Yes, shares soared 116% in 2023. But they still remain 71% below their all-time high.
What will SoFi stock price be in 2025? ›
SoFi stock price stood at $7.87
According to the latest long-term forecast, SoFi price will hit $8 by the middle of 2024 and then $10 by the middle of 2025. SoFi will rise to $12 within the year of 2026, $15 in 2028, $17 in 2029 and $20 in 2032.
What is the future value of SoFi? ›
The average one-year price target for SoFi Technologies, Inc. is $9.078. The forecasts range from a low of $4.04 to a high of $12.6. A stock's price target is the price at which analysts consider it fairly valued with respect to its projected earnings and historical earnings.
Who owns the most SoFi stock? ›
Hedge funds don't have many shares in SoFi Technologies. The Vanguard Group, Inc. is currently the company's largest shareholder with 7.7% of shares outstanding. With 4.3% and 3.8% of the shares outstanding respectively, SoftBank Group Corp. and BlackRock, Inc. are the second and third largest shareholders.
Why to invest in SoFi? ›
There are no account minimums, and no commissions for stocks and ETFs so you can get started with whatever amount you are comfortable with. SoFi does not require a minimum account balance so investors of all levels have access to the market.
Is SoFi bank safe from collapse? ›
Yes, funds deposited into SoFi checking and savings accounts are FDIC insured for up to $250,000 per depositor, for each ownership category, in the event of a bank failure.
How safe is SoFi bank? ›
Sofi Checking and Savings accounts are FDIC insured. Your funds are protected by FDIC insurance of up to $250,000 per member or $500,000 for joint accounts. If you'd like additional FDIC insurance, you can enroll in the SoFi Insured Deposit Program for up to $2 million in FDIC coverage.
What is the downside of SoFi? ›
SoFi Bank only offers one checking account, which we give 4.7 stars. It comes with no fees, a competitive APY, access to a massive ATM network and debit card and direct deposit perks. The main drawback is that it doesn't reimburse ATM fees for using out-of-network ATMs.
Which stock is best for 2025? ›
10 Multibagger Penny Stocks for 2025
| Name of the Share | Book Value (₹) | 1 Year (%) |
|---|
| Indian Railways Finance Corporation Ltd | 36.49 | 187.84 |
| Trident Ltd | 8.12 | 1.93 |
| Yes Bank | 14.08 | -2.23 |
| Exide Industries | 148.69 | 54.70 |
6 more rowsDec 20, 2023
We see the stock as significantly undervalued. Net interest income from SoFi's lending and financial services segment was still the largest driver of growth, increasing 70.6% from last year, though only 3.4% sequentially, to $402.7 million.
Is SoFi stock a good long-term buy? ›
For 2024, SoFi expects to generate $95 million to $105 million of net income. However, much of SoFi's long-term growth is dependent upon where interest rates will go. Faster than expected rate cuts could, in fact, turn out to be headwinds for the company's loan businesses.
Is SoFi a long-term buy? ›
SoFi Technologies (NASDAQ:SOFI) has very good growth prospects in the fintech sector and its current valuation is attractive, making it an interesting growth play for long-term investors.
Will SoFi stock ever go back up? ›
SoFi Technologies
SoFi management expects earnings to grow robustly over several years. Fool.com contributor Parkev Tatevosian forecasts where SoFi's (SOFI 3.69%) stock price could end up by 2030. *Stock prices used were the afternoon prices of April 1, 2024.
Is SoFi stock expected to go up? ›
Stock Price Forecast
The 20 analysts with 12-month price forecasts for SoFi Technologies stock have an average target of 8.90, with a low estimate of 3.00 and a high estimate of 14. The average target predicts an increase of 13.09% from the current stock price of 7.87.
What is the moving average of SoFi stock? ›
Sofi Technologies Inc (SOFI)
| Period | Moving Average | Price Change |
|---|
| 5-Day | 7.54 | +0.59 |
| 20-Day | 7.41 | +0.40 |
| 50-Day | 7.66 | -0.72 |
| 100-Day | 8.05 | -0.13 |
2 more rowsThere are no SoFi Technologies Inc dividends.
