SoFi Stock More Than Reflects Negative Sentiments at Current Multiples

littlesweetie
2022-04-21

Despite the gloomy markets, SOFI has continued to invest and become a major player in the fintech industry

SoFi Technologies$SoFi Technologies Inc.(SOFI)$ stock is down 55.37% in the year thus far, making it one of the many tech stocks that have lost considerable steam due to economic headwinds. However, after the company has lost so much value, there are reasons to believe it’s a deep value play.

SoFi Technologies is a company that uses AI to help people with personal finance. It uses machine learning and natural language processing to understand the financial situation of the users.

SoFi has been gaining popularity in recent years, as more and more people are turning towards technology for financial assistance. Mike Cagney founded the company to create a fulfilling experience for customers; he saw the need to offer AI-based solutions.

However, due to the larger issues in the lending space, SOFI stock is under pressure. The Biden administrationagain decided to extend the pauseon student loan payments. One of the biggest sources of revenue for SoFi is generated through refinancing educational debt.

In response, SoFi has revised its outlook downwards. The company expects adjusted net revenueto come towards $1.47 billion, down from the earlier outlook of $1.57 billion. Adjusted earnings before interest, taxes, depreciation, and amortization   (EBITDA) is now slated to top $100 million, versus the earlier forecast of $180 million.

Therefore, this news was another reason to stay away from SOFI stock. However, considering the valuation of SOFI stock, there is reason to purchase at these levels.

Is SOFI Stock a Buy?

SOFI stock has been falling steadily since November last year, leaving many of its excited investors who saw their assessment as a safe bet with their dreams crushed in the process. Sentiment across multiple industries is dipping,and rising interest rates are beginning to weigh downthe overall environment. The latest news added to the woes, leading to renewed fears regarding its future.

Despite the gloomy markets, SoFi has continued to invest and become a major player in the fintech industry. Anthony Noto, CEO of SoFi,sees possibilities for the fintech companyto operate in the financial technology space similar to how Amazon Web Services (AWS) operates in other markets. They want to be a key player first and then take up as much market share as possible.

I have talked about the bank charter approvaland how that will help the company move forward. However, it’s important to reiterate that it will go a long way in ensuring that its revenues are diversified. Eventually, the company plans on further developing itsbanking-as-a-service (BaaS) platform to take onsome of the traditional banking industry’s core features. The bank charter will help immensely in this regard.

The company is making headway into the future with several steps to help it succeed. The market selloff means many gems are trading at enviable discounts. At the current price, SOFI stock reflects the negative sentiment, and therefore, it’s a deep value play for the aggressive investor.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • Jason1616
    2022-04-21
    Jason1616
    Have to wait for next earnings to see the company directions. current share price in range. More downside
  • KevinQN
    2022-04-21
    KevinQN
    Stuck. Bought at 23 per share. Lost 70% of its value in just a quarter of a year. Possible will be a sub 5$ stock
  • jethro
    2022-04-21
    jethro
    yes i believe in it that it is definitely value in accumulating this counter
  • Big Boy
    2022-04-21
    Big Boy
  • simonlch6626
    2022-04-23
    simonlch6626
    等靓仔没问题
  • FiveStar
    2022-04-22
    FiveStar
    Nice! Thank you
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