Figured since I talk about SOFI a good bit, it might not hurt to throw something together for others to contribute to if interested.
SOFI has it’s own bank charter unlike other Fintech stocks. Some of their services include:
Private loans
Mortgage loans
Student loans
Banking
Credit cards
Money market accounts now offering 4% return
Stock broker that offers margin trading
Crypto broker
Average credit score is 750 and average yearly income is $125k+ for most of their loan clients
These are the reasons I’m still bullish on SOFI even with the banking fears as of current. They had a good quarter last earnings, and have pretty much reported great earnings for the last four quarters. Their loan business had nice growth. But unfortunately share price took a hit most likely due to investors fears in the current state of the economy and rising potential for defaults. Others probably saw that they were still holding loans on their books from previous quarters. But the CEO as of recent came out stating that defaults were only around 2%, deposit growth was substantial, and that it was in their best interest to hold loans on their books at a 6% return rather than sell the loans off for a 4% yield. Plus they are liquid enough to do that. There is also the upcoming student loan payments resuming which could be even more business for them with loan consolidations. Even if student loan forgiveness passes, it’s not like it’s going to hurt their overall revenue growth.
It’s been a good play, but it’s a longer term play that most people find boring. But it’s up decently from the $4.50 area in December 2022 when I told people they should probably buy at. If they did and held up earnings before last, they were nicely profitable. If they are still holding, they are still most likely in the green.
This sounds a lot more positive to me compared to someone like UPST (who offers primarily loans) that recently sold off $4 billion in loans on their books to an outside vendor, just to turn around and take on only $2 billion in new loans.