As far as stocks with turnaround potential are concerned, SoFi Technologies (NASDAQ:SOFI) remains a top option on my watch list right now. Sofi stock looks good from here.
The company provides a revolutionary digital finance platform, catering to millions of users seeking seamless banking solutions.
Originally a lending specialist focused on student loans, SoFi now offers banking services, investment tools, and more through its user-friendly app.
What distinguishes SoFi is its emphasis on students and young professionals, providing clear, beginner-friendly financial products and guidance.
SoFi has enjoyed robust customer loyalty as existing users embraced more services, driving its growth strategy through competitive rates and user-friendly interfaces.
Let’s dive into a few more reasons why this looks like a fintech stock worth buying on its recent dip.
User Growth is Surging
Over the past year, SoFi has nothing but flourishing and growing rapidly. From a digital growth perspective, SoFi has been performing well. The company has expanded its user base from 1 million in 2020s to its current state of 8 million users.
Although the company saw a 73% decline from its peak price, SoFi remains a compelling stock to own as it holds 4.6% interest rate and expansive financial services.
Moreover, the company has distinguished itself with unique offerings like career counseling and member events, challenging traditional banks like Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM).
Its lending segment, focusing on personal loans, mortgages, and student loans, generated $330 million in net revenue last quarter, driving SoFi’s profitability.
SoFi achieved a turnaround by reducing costs and enhancing services, showing strong financial performance with $88 million in net income, partly boosted by a onetime debt retirement.
Regular operations contributed $29 million. Despite a $7.4 billion market cap and price-earnings ratio of 43-times, some debate its valuation post-2020’s highs.
SoFi’s long-term potential lies in expanding fintech market share and products, but risks include competition, regulations, and technological shifts continue to hamper this stock on the valuation front.
Anthony Noto is Optimistic for SOFI
SoFi’s CEO Anthony Noto recently demonstrated some strong confidence in his own company, purchasing 30,715 shares at $6.48 each, totaling $199,110. This buy boosted his personal stake to 8.12 million shares.
His total insider buys for 2024 amounted to $797,342. Since SoFi went public, insiders sold $1.22 billion of shares and bought $16.13 million, with Noto accounting for $14.88 million or 92% of insider buys, without selling any shares.
SOFI Stock Looks Like a Decent Bet
Although it has some short-term hurdles, SoFi’s positives still outweigh its negatives. With low valuation and a 2.8-times price to sales ratio, the stock seems undervalued.
It’s my view that investors looking at the fintech sector have a decent option in SoFi here, if the company can execute moving forward.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.