8. Sofi Technologies Inc. (NASDAQ:SOFI)
Number of Hedge Fund Investors: 29
Jim Cramer sees a strong opportunity in buying SoFi Technologies Inc. (NASDAQ:SOFI) ahead of potential interest rate cuts. Despite the stock being down 25% this year, Cramer views SoFi Technologies Inc. (NASDAQ:SOFI) as well-managed under CEO Anthony Noto, who has appeared on Cramer’s show multiple times. Cramer believes that SoFi Technologies Inc. (NASDAQ:SOFI)’s current price drop presents a chance for investors to get in before rates begin to decrease. He also emphasizes that SoFi Technologies Inc. (NASDAQ:SOFI) is much more than just a company tied to student loans, urging people to recognize it as a fintech company, which is the core of its value.
“I think you buy Sofi Technologies Inc. (NASDAQ:SOFI) ahead of interest rate cuts. It’s down 25% for the year, even though it’s incredibly well-run. To me, this looks like an opportunity. Anthony Noto has come on the show several times, and we did need to see some news about rates. Frankly, I’d also like to see people stop equating this company solely with student loans. It’s a fintech, and that’s what matters.”
Sofi Technologies Inc. (NASDAQ:SOFI) is an appealing investment due to its strong growth in digital lending and neobank services, supported by its full banking license and robust consumer lending business. In Q2 2024, Sofi Technologies Inc. (NASDAQ:SOFI) ‘s revenue grew by 20.2% year-over-year, reaching $598.6 million, driven by high demand for its services.
Analysts have increased their Q3 2024 EPS estimate to $0.04, indicating improved profitability. The full banking license, acquired through Golden Pacific in 2022, gives Sofi Technologies Inc. (NASDAQ:SOFI) a competitive advantage by lowering funding costs and boosting profitability compared to non-bank rivals. Despite its growth, Sofi Technologies Inc. (NASDAQ:SOFI) is undervalued compared to traditional banks, with a favorable price-to-book ratio suggesting significant upside potential.
Additionally, Sofi Technologies Inc. (NASDAQ:SOFI)’s technological capabilities and efficient digital platform position it well in the expanding online financial services market. Overall, Sofi Technologies Inc. (NASDAQ:SOFI)’s revenue growth, banking license benefits, undervaluation, and technological strengths make it a strong candidate for long-term fintech investment.
Patient Capital Opportunity Equity Strategy stated the following regarding SoFi Technologies, Inc. (NASDAQ:SOFI) in its first quarter 2024 investor letter:
“SoFi Technologies, Inc. (NASDAQ:SOFI) fell in the first quarter despite delivering strong 4Q results and 2024 guidance supported by their non-lending businesses. The company continues to gain share in the digital lending and neo-banking space, consistently growing deposits at $2B a quarter. What differentiates the company is their focus on prime and super-prime customers (average FICO 749). Sofi is early in its life cycle, currently being a small player in a very large total addressable market (TAM). With their strong management team, we believe the company will continue to deliver on their guidance of strong growth and expanding margins.”
