Investing in SoFi when its price dips below $30: A promising move?
In the ever-evolving world of finance, SoFi Technologies has managed to stand out amidst the noise. Despite not being included in The Motley Fool's Stock Advisor's latest list of the 10 best stocks to buy now, the company has demonstrated impressive growth in the second quarter.
SoFi reported a significant 44% increase in revenue, reaching $858 million. This surge was further bolstered by a 72% jump in fee-based revenue, which reached $378 million. The company's earnings also saw a staggering 700% increase, with a profit of $0.08 per share.
The company's strong performance is reflected in its financial ratios. SoFi's price-to-earnings (P/E) ratio stands at 52, higher than the S&P 500's average multiple of about 30. However, its gross margin remains steady at 59.15%.
SoFi's stock, trading under the ticker NASDAQ: SOFI, currently stands at $25.53. The day's range for the stock is between $25.21 and $26.41, and the 52-week range spans between $6.75 and $26.61. The volume of shares traded today amounts to 54,432,518, with an average volume of 73,410,839 shares.
Despite its impressive performance, SoFi's growth remains contingent on the economy's strength and members' continued borrowing and spending. The company added 850,000 new members in the second quarter, marking a 34% increase. SoFi estimates it will add at least 3 million new members this year, a 30% increase from 2024.
The company's focus on member growth is evident in its efforts to improve its loan performance. SoFi's 90-day delinquency rate for personal loans decreased for the fifth consecutive quarter to 0.42%. Additionally, the annualized charge-off rate decreased from 3.31% to 2.83% in Q2.
Looking ahead, SoFi has raised its full-year guidance, predicting sales of about $3.38 billion in 2025 and net income of around $370 million. With these ambitious targets, SoFi continues to position itself as a key player in the financial technology sector.
Despite not making it onto The Motley Fool's latest list, SoFi Technologies' strong Q2 performance and ambitious growth plans suggest that it remains a company to watch for investors seeking opportunities in the financial technology sector.
