SoFi: Misplaced Fears

 

  • SoFi has rallied sharply from lows below $5, but the stock shouldn't have traded this low.
  • The fintech specializes in refinancing student loans and the market has misplaced fears over student debt forgiveness.
  • The stock only trades at 3x '23 revenue targets with the end to the student debt moratorium providing upside to sales targets.
  • This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More » 
As with a lot of fintechs, SoFi Technologies (NASDAQ:SOFI) bounced strongly off the May panic lows. Whether due to recession or credit fears, the stock market no longer views the growth story in the same positive light despite a business model that remains strong. My investment thesis remains very Bullish on this stock as the major prescribed weakness due to student loan forgiveness concerns remains very misplaced.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Update - June 9 

Full speed ahead for SoFi while the stock trades down close to the lows.

-SoFi Technologies (NASDAQ:SOFI) expects EBITDA to ramp up in the second half of 2022 on the continued growth of its high-margin personal loans and Galileo tech platform in tandem with its improved cost of capital now that it owns a bank, Chief Financial Officer Chris Lapointe said during the Piper Sandler Global Exchange and FinTech Conference.

-Its personal loan business "has been doing extremely well in a rising rate environment," he said. In addition, he sees "continued and sustained cost throughout the rest of the year" for Galileo.

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