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Should I Invest in SoFi Technologies Stock?

Whether or not you are thinking about investing in stocks, looking to add to your portfolio, or interested in SoFi, we will discuss this specific stock. 


SoFi Technologies, Inc.
company nameSoFi Technologies, Inc.
sectorFinancial Services
industryCredit Services
address234 1st Street, San Francisco, CA, United States
countryUnited States
websitehttp://www.sofi.com

When deciding to purchase a stock, there are always copious reasons why you should or should not jump at that stock everyone on Reddit is saying is going “to the moon.” 

In this particular piece, we will observe and analyze whether or not it’s in your best interest to invest in SoFi right now or hesitate.

As of Oct. 29, SoFi Technologies Inc. closed 2.48% lower than it did the previous day at $20.09 a share. SoFi’s market cap is currently at 15.82B, and the stock's 52-week high and low is $10.10 - $28.26. 

Moreover, the stock previously closed at $19.91, meaning SoFi rose 0.90% from the previous trading day.

Thus far, SoFi has experienced eight consistent quarters of growth and continues to develop and expand its financial product services and member growth. 

In addition, SoFi Technologies stock is currently volatile, which typically indicates that you should buy in the stock market world.  We will discuss why you should buy SoFi and why you should not buy SoFi: the bull and the bear. 

When choosing to invest in something, you should always consider the financial history of the company, your current financial status, and the condition of the company you are considering buying stock in. 

A piece of advice that everyone loves to regurgitate is: don’t invest in a company you don’t know, especially when you are first entering the stock market world.

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About SoFi Technologies

SoFi Technologies is an American company based in San Francisco that offers its consumers various financial services to help them reach financial independence. 

SoFi’s services have helped its customers refinance their student loans, issue personal, home, and auto loans, and provide investment and banking opportunities. 

On top of that, you can apply for a SoFi credit card, protect your assets, invest in cryptocurrency, and, if applicable, finance your small business. 

SoFi’s commitment to relieving people from financial burden has helped millions of members reach a point of financial stability. 

Interestingly, during its inception in 2011, initially, the company wasn’t an online financing company. Instead, they were a social finance company that wanted to help recent college graduates connect with their local alumni. 

In May of 2012, they began their transition into becoming a leading financial planning service. 

Led by Chief Executive Officer (CEO); Anthony Noto, Chief Financial Officer (CFO); Chris Lapointe, and Chief Marketing Officer (CMO); Lauren Stafford Webb, SoFi Technologies currently employs 2,441 like-minded individuals. 

Aside from being the current CEO, Noto is also a board member at SoFi, meaning he is one of the thirteen fiduciaries responsible for the company's governance, strategic direction, and accountability. 

He has participated in "insider trading," that he has documented with the SEC, showing that he has bought and sold shares of SoFi. According to gurufocus, Noto bought 7,150 shares of SoFi at $13.78 in August 2020.

Bull Case

SoFi is in no way a small business; however, its growth is noticeable, just like a small business.

In other words, SoFi’s growth is evident as it continues to guide millions of customers to financial independence. We will highlight some of the reasons we should consider investing in SoFi.

  • SoFi’s partnership with Galileo Financial Technologies, a global payments platform that removes complexity from payments, points to a good investment opportunity. 
  • The acquisition of Galileo has shown a positive increase, from 36 million to 79 million, in the number of accounts on Galileo’s platform. 
  • SoFi’s ever-growing number of members correlated to more users on Galileo’s payment platform, causing its total net revenue to rise 138%. 
  • SoFi’s second-quarter reports of 2021 showed “adjusted net revenue of $237 million exceeded quarterly guidance of $215 million to $220 million by 10% at the low end and 8% at the high end.”
  • SoFi will review their 2021 third-quarter results on Nov. 10, and they expect their adjusted net revenue to increase by $10 million.
  • SoFi continues to show consistent growth, with the number of members using SoFi Invest and SoFi Money tripling and total products growing from 1.6 million to 3.7 million.

Bear Case

After hearing the positives, it’s time to look at the negatives:

  • SoFi experienced an unsatisfactory 9% growth in student loans from 2020 to 2021. While COVID can attribute to the lack of change, the pandemic continues, which may cause student loan growth and other financial services that SoFi provides to slow.
  • SoFi’s competitors: Funding Circle, Avant, Lending Club, Upstart, LendingTree, and CommonBond, could easily replicate the various services that SoFi provides. If their competitors deployed similar tactics, unsolicited competition for the company could prompt SoFi stock to plummet.
  • Liz Young, head of the investment strategy, discussed her thoughts on the company’s final quarter of 2021. In her studies, Young mentions that SoFi’s supply chain issues and labor shortages will cause the company’s GDP to fall short of previous predictions.
  • Young also notes that her consumer price index (CPI) observations indicate that the company has had a persistent six months of inflations above 4%, meaning "it starts to pressure stock performance."
  • According to Young, SoFi is volatile and won’t see movement up the S&P 500 until 2022. 

SoFi Competitors

LLendingClub Corporation
$29.17
SymbolLC
Price$29.17
Change$0.0700
Change %0.24%
Volume$2,726,897.00
Marketcap2.91B
UUpstart Holdings, Inc.
$176.16
SymbolUPST
Price$176.16
Change$4.57
Change %2.66%
Volume$4,783,662.00
Marketcap14.44B
TLendingTree, Inc.
$115.51
SymbolTREE
Price$115.51
Change$8.44
Change %7.88%
Volume$339,297.00
Marketcap1.54B

Final Verdict

As we have discussed, there are reasons why you should and shouldn’t invest in SoFi. Of course, we cannot predict the company's condition; however, financial trends, reliance on outside sources, and possible competition from other companies make us wonder if we should expect a positive return from SoFi. 

“Investing involves risk,” and that is always the case, even if you were to invest in a well-known, historically credible stock like Google or Apple. 

We would never suggest someone buy or not buy a specific stock, as it is up to you - we cannot tell you what to do with your money. We can only provide a guide to help you make well-informed and thought-out decisions during your money investment journey.

At this point, investors should buy now or wait for SoFi’s last-quarter reports for the year.  

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