Over the past six months, SoFi’s stock price fell to $15.67. Shareholders have lost 5% of their capital, which is disappointing considering the S&P 500 has climbed by 15.2%. This may have investors wondering how to approach the situation.
Following the drawdown, is now a good time to buy SOFI? Find out in our full research report, it’s free.
Why Are We Positive on SOFI?
Starting as a student loan refinancing company founded by Stanford business school students in 2011, SoFi Technologies (NASDAQ:SOFI) operates a digital financial platform offering lending, banking, investing, and other financial services to help members borrow, save, spend, invest, and protect their money.
1. Skyrocketing Revenue Shows Strong Momentum
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
Over the last five years, SoFi grew its revenue at an incredible 37.9% compounded annual growth rate. Its growth beat the average financials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
SoFi’s full-year EPS flipped from negative to positive over the last four years. This is a good sign and shows it’s at an inflection point.
Final Judgment
These are just a few reasons why SoFi ranks highly on our list. After the recent drawdown, the stock trades at 21.8× forward P/E (or $15.67 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.
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