SOFI Technologies, Inc. is an online personal finance company. They provide a range of lending and wealth management services. At the time of this post, they are trading at about $23.65. They released earnings for Q3 on November 10. They reported Revenue of $272.01 million for the 3rd quarter of 2021 which is a 35.5% increase from the same prior-year period. SoFi beat estimates by $16.38M. Furthermore, they added 377,000 new members which is the second-highest quarterly increase in the company's history. That being said, SoFi looks to be a potential buy. Not convinced yet? Here are some other reasons why I believe SoFi is a good company to buy into.
- SoFi’s total members grew 96% Year-over-Year. Part of the reason why this occurred is because the products they offer have doubled Year-over-Year. The company beat Revenue Expectations, Earnings Per Share, almost doubled their member growth Year-over-Year and began offering way more products. Most people can find a product that suits them through SoFi’s financial services. In Quarter 3, they did a great job at demonstrating their ability to capture market share.
- SoFi has increased the amount of marketing they’ve been doing. They’ve been working with influencers across Twitter, Instagram, Youtube, and Tik Tok. Which has driven an additional 400 Million impressions and 775K engagements with SoFi content. SoFi has been investing a lot in their marketing strategy and attempts to acquire customers which has obviously translated into very great results. By the looks of it, SoFi has started to get creative in adopting additional customers. These new strategies could help boost the company by a lot.
- In relation to their valuation, SoFi experienced strong growth which was driven by the growth of users they had experienced and the products they offer, especially in the personal loans sector. Right now, the company looks like it’s trading at a decent price in comparison with other companies in this sector. If the company can somehow increase their Earnings before interest, taxes, depreciation, and amortization over the years coming, they could see it’s multiples inflate.
If you’ve made it this far into this post you’re probably asking yourself, Are there any risks involved with investing in this company? Like any investment, there is always a risk. Despite the fact that SoFi reported a strong quarter, they need to show that they can keep up their strength. The stock continuing to go up will be contingent on continued success and an increase in profitability over the future quarters. That being said, I wouldn’t say this is a strong buy, but a potential one. It could be a great buy if it dips again. However, This company is currently trading at reasonable multiples.
Thanks for reading everyone! If you have any questions let me know in the comments below or feel free to message me! I hope this helped you figure out whether or not to buy into SoFi. Also, feel free to check out my profile and see the analysis I did on Digital Turbine AKA $APPS. You will definitely learn something from it!
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