While I don't own any shares yet, I'm becoming really interested in SoFi Technologies (NASDAQ: SOFI). The financial technology stock is down more than 30% this year and currently sits over 45% below its 52-week high. That lower price certainly makes SoFi much more interesting to me.
Here's why I don't own any shares yet and what would convince me to buy the financial stock. This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.
For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Shares of SoFi Technologies have slumped even though the company is having a strong year. That's abundantly clear in its recently reported second-quarter financial results, where SoFi set records for total loan originations, revenue, member and product growth, and earnings.
It didn't just push past its prior highs; Sofi delivered brisk growth, with adjusted net revenue soaring 40% to $1.2 billion and members growing 35% to 15.8 million. It also added a record 2.2 million products, bringing the total to 24.4 million, a 42% increase. That's a continuation of its brisk growth in recent years.
SoFi's revenue has risen from $1.5 billion in 2022 to nearly $3.6 billion last year and is on track to top $4.7 billion in 2026. Meanwhile, the company is increasingly profitable. The financial company expects its robust growth to continue.
It's targeting 30% compound annual adjusted net revenue growth through 2028 (from last year's level) and 38%-42% adjusted earnings-per-share growth during that period. Up until now, SoFi's valuation has kept me from buying the stock. At the beginning of the year, SoFi traded at more than 75 times earnings.
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