What a time it’s been for SoFi. In the past six months alone, the company’s stock price has increased by a massive 113%, reaching $29.16 per share. This was partly due to its solid quarterly results, and the performance may have investors wondering how to approach the situation.
Following the strength, is SOFI a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free.
Why Is SOFI a Good Business?
Starting as a student loan refinancing company founded by Stanford business school students in 2011, SoFi Technologies (NASDAQ: SOFI) operates a digital financial platform offering lending, banking, investing, and other financial services to help members borrow, save, spend, invest, and protect their money.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.
Luckily, SoFi’s revenue grew at an incredible 51.2% compounded annual growth rate over the last five years. Its growth surpassed the average financials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
Analyzing the change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
SoFi’s full-year EPS flipped from negative to positive over the last three years. This is a good sign and shows it’s at an inflection point.
Final Judgment
These are just a few reasons SoFi is a high-quality business worth owning, and with the recent rally, the stock trades at 78.3× forward P/E (or $29.16 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.
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