Coming out of its best quarter yet, SoFi Technologies, Inc. (NASDAQ: SOFI) appears to be set for another solid quarter in Q2 after the fintech quadrupled its market share of new account openings in the first half of the year. With SOFI planning to release its Q2 earnings earlier on July 31, SOFI stock could be set to continue running as the company could share good news regarding its profitability.
SOFI Fundamentals
Digital Banks and Fintechs Growth
Following the collapses of several regional banks earlier this year, fintech platforms have been the biggest winners of this unfortunate catalyst – with SOFI at the forefront. Recently, Cornerstone Advisors released a study that showed that Americans are shifting from traditional and mega banks to digital banks and fintechs like SOFI, Chime, and PayPal (NASDAQ: PYPL).
Digital banks and fintechs have captured almost half of all new checking accounts opened in 2023, with SOFI quadrupling its market share of accounts opened from 1% in 2020 to 4% in 2023, while Wells Fargo (NYSE: WFC) dropped from 8.1% to 3.5% in the same period.
With this in mind, the trust in the banking sector could further deteriorate if more banks fail this year – especially with the Fed expecting 2 more rate hikes this year. In that case, SOFI could be on track to further increase its new account openings given its impressive portfolio of financial services.
In addition to the declining confidence in the banking sector, the bulk of new accounts belongs to young consumers – with more than 72% of new checking accounts belonging to Gen Z and Millenials. That means that SOFI especially is well-positioned to see an increase in its market share as more young consumers are able to open new accounts.
Q2 Earnings
While SOFI normally reports its Q2 earnings around mid-August, the fintech powerhouse announced that it is going to release its Q2 2023 earnings earlier this year on July 31. SOFI bringing its Q2 2023 earnings forward could mean that it expects to report extremely positive earnings. In that case, SOFI stock could replicate the run it made earlier in June after the debt ceiling deal that saw the resumption of student loans in September, especially since the decision to post the Q2 earnings could be related to the company becoming profitable for the first time.
Technical Analysis
SOFI stock’s trend is bearish with the stock trading in a downward channel. Looking at the indicators, the stock is trading below the 50, and 21 MAs which are bearish indications, and is trading above the 200 MA which is a bullish indication. Meanwhile, the RSI is neutral at 43 and the MACD is approaching a bullish crossover.
As for the fundamentals, SOFI’s upcoming Q2 earnings report on July 31 is a major catalyst since the company may report a profit for the first time thanks to the increase in its market share of new account openings. If SOFI successfully achieves profitability in Q2, the stock could replicate its earlier run in June and reach a new 52-week high. With the stock trading near support, the current SOFI stock price could prove to be a good entry for bullish investors.
SOFI Forecast
Digital banks and fintechs are currently gaining ground over traditional and mega banks, with SOFI quadrupling its market share of new account openings in the first half of 2023 compared to 2020. Furthermore, the announcement of earlier than usual earnings could mean that SOFI expects positive Q2 2023 earnings, which could see SOFI stock running, especially if SOFI achieves profitability way before the student loan payments resume. All of that makes SOFI stock one of the best fintech stocks to keep an eye on.
SOFI, momentum will become unstoppable.
$SoFi Technologies Inc.(SOFI)$ $PayPal(PYPL)$ $Wells Fargo(WFC)$
RESOURCE:TRADINGVIEW
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