KSONG
2023-04-03

Ok

@financead：
Down about 6% in the past month amid the calamity in the financial sector, SoFi $SoFi Technologies Inc.(SOFI)$ and its one-stop shop for financial services saw its recent rally to start 2023 stall as investors seemingly lost faith in any stock tied to banking. Now trading roughly 35% above its 52-week lows -- but still down 47% from its 52-week highs -- SoFi's stock appears stuck in limbo as the market worries about the company's rapidly expanding banking operations. Initially well known for its lending segment consisting of personal, student, and home loans, SoFi received a bank charter designation in 2022 and launched full speed ahead into the financial services arena. Highlighting this incredible ramp-up within its fledgling unit, the company saw deposits from its customers grow from $1 billion early last year to $7.3 billion in its most recent quarter. Although this incredible growth would generally be viewed as a positive, recent bank runs leave investors asking: Is SoFi safe? First, roughly 90% of the company's burgeoning deposit base is insured, compared to 15% at failed Silicon Valley Bank. This layer of security is important, as it preempts the need for customers to withdraw their funds for fear of losing them in the first place. Second, 88% of SoFi's deposits came via direct deposits, meaning they are consistent and predictable, building a sticky, stable base of funding. Third, the company has $5 billion undrawn on its $8.4 billion warehouse to continue running its lending segment. Combined with this large base of deposits, these figures highlight that SoFi has excess capital. Furthermore, at a time when many smaller banks have seen their depositors flee for the megabanks, SoFi expects to see deposits grow by at least $2.3 billion in its next quarter. Management expects these deposits to save $125 million annually in loan origination funding, a significant figure compared to its sales of $1.6 billion last year. Armed with this low-cost funding, SoFi has forecast 25% to 30% sales growth in 2023, a stand out performance in the tumultuous banking sector.
Down about 6% in the past month amid the calamity in the financial sector, SoFi $SoFi Technologies Inc.(SOFI)$ and its one-stop shop for financial services saw its recent rally to start 2023 stall as investors seemingly lost faith in any stock tied to banking. Now trading roughly 35% above its 52-week lows -- but still down 47% from its 52-week highs -- SoFi's stock appears stuck in limbo as the market worries about the company's rapidly expanding banking operations. Initially well known for its lending segment consisting of personal, student, and home loans, SoFi received a bank charter designation in 2022 and launched full speed ahead into the financial services arena. Highlighting this incredible ramp-up within its fledgling unit, the company saw deposits from its customers grow from $1 billion early last year to $7.3 billion in its most recent quarter. Although this incredible growth would generally be viewed as a positive, recent bank runs leave investors asking: Is SoFi safe? First, roughly 90% of the company's burgeoning deposit base is insured, compared to 15% at failed Silicon Valley Bank. This layer of security is important, as it preempts the need for customers to withdraw their funds for fear of losing them in the first place. Second, 88% of SoFi's deposits came via direct deposits, meaning they are consistent and predictable, building a sticky, stable base of funding. Third, the company has $5 billion undrawn on its $8.4 billion warehouse to continue running its lending segment. Combined with this large base of deposits, these figures highlight that SoFi has excess capital. Furthermore, at a time when many smaller banks have seen their depositors flee for the megabanks, SoFi expects to see deposits grow by at least $2.3 billion in its next quarter. Management expects these deposits to save $125 million annually in loan origination funding, a significant figure compared to its sales of $1.6 billion last year. Armed with this low-cost funding, SoFi has forecast 25% to 30% sales growth in 2023, a stand out performance in the tumultuous banking sector.

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.

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