SoFi Has Massive Upside Potential But The Tech Platform Is A Headwind
Summary
- SOFI consistently beats estimates and raises guidance, but the market values it like a bank due to its revenue mix from lending and financial services.
- SOFI's growth is impressive, with a 32.8% YoY revenue increase and 34.24% YoY member growth, but its technology segment underperforms expectations.
- SOFI's valuation is stretched for a financial institution; it needs to significantly grow its technology revenue to be valued as a tech company.
- Despite strong financials and growth, SOFI must solidify its tech platform to achieve a higher premium and avoid being seen as just another bank.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of SOFI, C, BAC, TFC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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