$SOFI - Undervalued. Oversold. A screaming buy.

Everyone know the market has been beaten down, and that trend may continue for the unforeseeable future. But most of the bearish activity we saw last week was a result of the $3.3 trillion in options that expired yesterday. Market manipulation at its best. MMs/HFs win. You lose. In this takedown, many bad players have been spanked. And many value stocks as well. The damage has been indiscriminate. SOFI represents a value proposition that should be trading at a much higher share price for the following reasons: SOFI now has the long desired bank charter. Unfortunately, this long awaited news hit at a bad time in the market. But it doesn't change the fact that this is a game changer for SOFI. This makes doing business better for SOFI. https://www.stck.pro/news-link/21752187 Shares are currently trading near the 52 week low of $12.02. When that 52 week low occurred, SOFI did not have the bank charter and other positive factors mentioned below. SOFI is a much better proposition today than when that low occurred a year ago. SOFI is currently trading at approximately 10x their revenue. This is insanely low for what is now a bank. For the first 9 months of 2021, revenue grew an amazing 77% year over year and those numbers are expected to increase to $1.2 billion on their next earnings report on Feb. 9th. Analysts are expecting SOFI's revenues to increase by 40% each quarter between now and 2023. Q3 2021, SOFI reported 2.9 million customers. That was an increase by 96% from the previous year. SOFI has doubled the number of financial service products it manages for its clients year over year as of Q3 2021 as well. SOFI owns the Galileo financial services platform which brings financial services to businesses and has a large and growing number of B2B clients. SOFI has a market cap that is smaller than most small banks. When the bank charter completes next month, SOFI should easily find itself in the top 100 banks by market cap. Here is a current list of banks by market cap. SOFI has their name on the stadium hosting the Super Bowl which will give even more exposure to their company and services. https://preview.redd.it/63vynxd3fad81.png?width=3200&format=png&auto=webp&s=7310469ad9e2eae97ff7bc0c2260c28dbaea5a54 Analyst price targets look as follows: https://preview.redd.it/75ucop1lgad81.png?width=908&format=png&auto=webp&s=277db81ef19b423af102fbcb76d0296860cd169a This video does a great job explain how obtaining the bank charter will help SOFI: https://www.youtube.com/watch?v=49xrLU_wQMY This is what Barron's had to say about SOFI: SoFi Technologies SOFI-NasdaqOutperform Price $12.25 on Jan. 19 by Wedbush We’re initiating coverage of SoFi with an Outperform rating and a $20 price target. Our rating is based on the company’s strong growth outlook, with a five-year revenue compound annual growth rate of 28% through 2026. An increasing brand presence should drive member growth; its integrated technology platform, Galileo, is a competitive advantage that allows for a seamless cross-buying experience aimed at a digitally native younger cohort; it has strong unit economics across its products; we expect credit quality to be stronger than peers, given that its borrowers are at the higher end of the credit spectrum, with an average FICO of 750; and the company’s pending bank charter [approved on Jan. 18] should accelerate earnings growth, in our view. The company is a one-stop shop for financial services, and this is a significant competitive advantage over neobank competitors that tend to focus on niche offerings rather than the full financial picture. Analyst recommendations are as follows: https://preview.redd.it/oeycwv7bhad81.png?width=634&format=png&auto=webp&s=0877dbf485def15025d8e8d40b67fc369d80422c If you look at the cyclic nature of how SOFI trades, you can see that it is due to another major move up. As can be seen by the chart, SOFI is very oversold, and at a time where the company has never looked stronger. https://preview.redd.it/lnu1d5ekhad81.png?width=850&format=png&auto=webp&s=cb5dc456860e750e0cbb94ccdcd54404d676136c Bears will continue to dump negative on SOFI, but they can't beat the fundamentals. They can't back up their FUD with numbers. So they will then try to sell you on the ever impending market crash. If there was going to be a market crash soon, we would see evidence of that in the debt market. That evidence does not exist. Expect any market correction to be gradual and drawn out over time as the Fed eases inflation. TLDR: SOFI represents a value proposition and tremendous great growth potential. When fundamentals start to matter again, SOFI is already prepared to meet those expectations. https://preview.redd.it/mtetsuzofad81.png?width=578&format=png&auto=webp&s=c823d5ef741417e54d28f607dcb934a58f4cf943 Disclaimer: This is not financial advice. I'm a small investor that is just sharing my opinion on SOFI. I am currently holding a small number of calls on SOFI expiring 01/28 at $15.00 and $17.50. I plan on buying more calls on Monday if we see any further price decline. Edit: Added YouTube video link.

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$SOFI - Undervalued. Oversold. A screaming buy.

bullish

Everyone know the market has been beaten down, and that trend may continue for the unforeseeable future. But most of the bearish activity we saw last week was a result of the $3.3 trillion in options that expired yesterday. Market manipulation at its best. MMs/HFs win. You lose.

In this takedown, many bad players have been spanked. And many value stocks as well. The damage has been indiscriminate.

SOFI represents a value proposition that should be trading at a much higher share price for the following reasons:

  1. SOFI now has the long desired bank charter. Unfortunately, this long awaited news hit at a bad time in the market. But it doesn't change the fact that this is a game changer for SOFI. This makes doing business better for SOFI. https://www.stck.pro/news-link/21752187
  2. Shares are currently trading near the 52 week low of $12.02. When that 52 week low occurred, SOFI did not have the bank charter and other positive factors mentioned below. SOFI is a much better proposition today than when that low occurred a year ago.
  3. SOFI is currently trading at approximately 10x their revenue. This is insanely low for what is now a bank. For the first 9 months of 2021, revenue grew an amazing 77% year over year and those numbers are expected to increase to $1.2 billion on their next earnings report on Feb. 9th.
  4. Analysts are expecting SOFI's revenues to increase by 40% each quarter between now and 2023.
  5. Q3 2021, SOFI reported 2.9 million customers. That was an increase by 96% from the previous year.
  6. SOFI has doubled the number of financial service products it manages for its clients year over year as of Q3 2021 as well.
  7. SOFI owns the Galileo financial services platform which brings financial services to businesses and has a large and growing number of B2B clients.
  8. SOFI has a market cap that is smaller than most small banks. When the bank charter completes next month, SOFI should easily find itself in the top 100 banks by market cap. Here is a current list of banks by market cap.
  9. SOFI has their name on the stadium hosting the Super Bowl which will give even more exposure to their company and services.



Analyst price targets look as follows:



This video does a great job explain how obtaining the bank charter will help SOFI:

https://www.youtube.com/watch?v=49xrLU_wQMY

This is what Barron's had to say about SOFI:

SoFi Technologies SOFI-NasdaqOutperform Price $12.25 on Jan. 19 by Wedbush

We're initiating coverage of SoFi with an Outperform rating and a $20 price target. Our rating is based on the company's strong growth outlook, with a five-year revenue compound annual growth rate of 28% through 2026. An increasing brand presence should drive member growth; its integrated technology platform, Galileo, is a competitive advantage that allows for a seamless cross-buying experience aimed at a digitally native younger cohort; it has strong unit economics across its products; we expect credit quality to be stronger than peers, given that its borrowers are at the higher end of the credit spectrum, with an average FICO of 750; and the company's pending bank charter [approved on Jan. 18] should accelerate earnings growth, in our view. The company is a one-stop shop for financial services, and this is a significant competitive advantage over neobank competitors that tend to focus on niche offerings rather than the full financial picture.

Analyst recommendations are as follows:



If you look at the cyclic nature of how SOFI trades, you can see that it is due to another major move up. As can be seen by the chart, SOFI is very oversold, and at a time where the company has never looked stronger.



Bears will continue to dump negative on SOFI, but they can't beat the fundamentals. They can't back up their FUD with numbers. So they will then try to sell you on the ever impending market crash. If there was going to be a market crash soon, we would see evidence of that in the debt market. That evidence does not exist. Expect any market correction to be gradual and drawn out over time as the Fed eases inflation.

TLDR: SOFI represents a value proposition and tremendous great growth potential. When fundamentals start to matter again, SOFI is already prepared to meet those expectations.



Disclaimer: This is not financial advice. I'm a small investor that is just sharing my opinion on SOFI. I am currently holding a small number of calls on SOFI expiring 01/28 at $15.00 and $17.50. I plan on buying more calls on Monday if we see any further price decline.

Edit: Added YouTube video link.

read-time
4 min
15.00
Target Price
7/ 10
Confidence
1-2 Months
Timeframe
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