SoFi's Big Move into Crypto: What's Next for the Stock?
Expanding Presence in the Blockchain Space
SoFi Technologies has recently taken a significant step into the crypto world by launching its own stablecoin, SoFiUSD. This move is part of a larger strategy to expand its presence in the blockchain space, following the launch of SoFi Crypto. The company is leveraging its status as a regulated national bank to offer a stablecoin that focuses on improving payment flows and liquidity movement, rather than just speculation.
About SoFi Technologies
SoFi Technologies is a digital financial services company based in San Francisco, California. It offers a wide range of services, including lending, banking, investing, credit cards, and financial planning, all accessible through a single mobile platform. The company's national banking charter gives it a regulatory edge over other fintech competitors. With a market capitalization of $32 billion, SoFi is considered a large-cap fintech company.
Stock Performance and Valuation
The stock of SoFi Technologies has seen significant volatility over the past year, ranging from a low of $8.60 to a high of $32.73. Despite a strong appreciation over the past year, the stock is still trading below its recent peak, currently around $27 per share. However, it has outperformed the overall market in the past 12 months.
- Trailing P/E: 84x
- Forward P/E: 68x
- P/S Multiple: 11.4x
Q3 Earnings Highlights
SoFi recently reported strong Q3 earnings:
- EPS: Doubled from the previous year to $0.11
- Net Revenue: Increased by 38% to $961.6 million
- Net Income: Surged by 129%
- GAAP Basis: Eighth consecutive profitable quarter
- Adjusted EBITDA: Increased to $276.9 million
- Adjusted Margin: 29%
- Adjusted Net Revenue: All-time high of $949.6 million
- Membership Growth: 905,000 new members added, bringing the total to 12.6 million
- Product Adoption: 40% of new product accounts from existing members
SoFiUSD and Future Growth
The introduction of SoFiUSD aligns with the company's strategy of fee-driven growth and infrastructure monetization. The stablecoin is designed to benefit SoFi's customers and also provide infrastructure on a white-label basis for other banks and fintech companies. The CEO, Anthony Noto, believes that blockchain technology is in a supercycle and that SoFiUSD can help overcome issues like slow settlement times and lack of transparency in reserves.
Analyst Consensus
Analysts have a neutral stance on SoFi stock, with a consensus "Hold" rating and a price target of $27.69, close to the current stock price. Analyst targets vary widely, from a high of $38 to a low of $12, reflecting differing opinions on the company's growth potential and profitability.
