July 20, 2024

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Is SoFi Technologies a Millionaire-Maker Stock?

2 min read

SoFi Technologies (NASDAQ: SOFI) is an up-and-coming fintech company that aims to change the way Americans manage their finances. It’s leading the charge toward a seamless, digital banking experience, and it has attracted millions of customers.

But after SoFi stock soared in 2023, it’s tanking this year. Is it in bargain territory now? And could adding it now help investors build a millionaire-maker portfolio?

The bank of the future

SoFi is an all-digital financial services company that serves its customers through an easy-to-use, all-in-one app. It began as strictly a lending business, but now offers bank accounts, investing tools, and more.

What helps it stand out from the other digital banks proliferating today is its focus on students and young professionals. It designs its products to be appealing to customers in those demographics, with clear graphics and explanations for people who are novices in the arena of managing their own finances. SoFi takes them by the hand and walks them through setting up their financial lives for the first time.

These customers are rewarding it with strong loyalty. Beyond the additions of new customers, it is benefiting as its established customers adopt more of its products and expand their relationships with the company.

In a nutshell, that’s SoFi’s growth strategy: Attract customers with low rates and an easy-to-use interface; earn their trust, (success at which is illustrated by its high product adoption and direct-deposit rates); and scale up and increase profits.

The numbers tell the story. SoFi’s net revenue increased 37% year over year in the first quarter to $645 million. It added more than 600,000 new members (44% more than it added in the prior-year period) to bring its total to more than 8 million. And the total number of products being used by those customers increased by 38% to nearly 12 million.

It posted GAAP (generally accepted accounting principles) net income of $88 million, making Q1 its second straight quarter in the…

2024-06-19 07:00:00

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