To The Moon

The next 18 months will be very strong for this "bank"...

THREAD

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1. Rate Cuts

The high rates over the last 3 years have been headwinds to the $SoFi Technologies Inc.(SOFI)$ $SOFI business.

The core business model for $SOFI is originations which they then sell (normally within 3-6 months).

Demand for loans will increase with lower rates. Originations will therefore increase.

Lower rates will also mean more liquidity for banks and asset managers to buy up loans meaning $SOFI earns more revenue.

2. Cross Selling

$SoFi Technologies Inc.(SOFI)$ could hit 10 million members by the end of the year which they sell to their 12.7 million products.

Currently the average member has 1.45 products.

If the rate of product growth continues to exceed member growth, this should reach 2-2.5 over the next few years.

This will massively increase Average Revenue Per Customer which leads to lower cost revenues --> higher margins and higher EPS.

3. Diversified Business

$SoFi Technologies Inc.(SOFI)$ could easily push their lending segment more than they are today to drive more revenue.

But that's not the goal.

The goal is to create a low risk, low capital intensive business.

Yet they're still managing to grow at +26% YoY.

4. Personal Loan Originations Market Share

Full credit goes to @DataDInvesting for this chart and research.

Look how $SoFi Technologies Inc.(SOFI)$ are completely destroying fellow fintechs $LendingClub(LC)$ and $Upstart Holdings, Inc.(UPST)$ .

Remember...as I just said above. They're being conservative with their lending segment...and these are the results still.

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5. Financial Services Platform

This is one of my favorite parts about $SoFi Technologies Inc.(SOFI)$ .

The variable costs are so low. This means as revenue increases...costs will stay more or less the same.

The margin expansion potential here is huge.

6. Institutional Buying

$SOFI institutional buying is heading up every single month since November 2023.

The algorithms are starting to have $SoFi Technologies Inc.(SOFI)$ appear more and more.

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7. Index inclusion

$SoFi Technologies Inc.(SOFI)$ soon will meet all criteria to be part of the S&P Midcap 400.

Generally, this adds more investor awareness, and provides another bullish catalyst for investors. It's not a big point...but it certainly will help.

8. Not A Bank

$SoFi Technologies Inc.(SOFI)$ P/B value has increased of course but it's still low.

The argument about $SOFI being just a bank is silly.

1. They have a tech platform.

2. There's no "bank" that is growing anywhere near the pace of $SoFi Technologies Inc.(SOFI)$ .

9. GAAP Profitability

GAAP EPS has been a troublesome number for $SoFi Technologies Inc.(SOFI)$ for quite some time...but not in 2024.

They're now a fully profitable company but the TTM figures still take into account negative EPS figures.

That will no longer be the case soon. The big bearish argument about $SoFi Technologies Inc.(SOFI)$ profitability is out the window.

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10. Valuation

$SoFi Technologies Inc.(SOFI)$ are expected to hit $2.85 billion in revenue in 2025.

Estimates tend to be beaten with $SoFi Technologies Inc.(SOFI)$ . I see no reason why they can't hit $2.95 with interest rate cuts and a push in lending over the next 18 months.

With a small bit of multiple expansion to 5x (completely doable)...you have a $14.75 billion market cap.

That's 36% just in a year. Long term I see way more.