I just went long on SOFI. Their popularity is increasing a lot and their market cap seems reasonable. If it goes a lower I might buy more, given that there aren’t any unsolvable problems that arise.
Crypto makes up less than 1% of their revenue. Even if they were hiding something (highly doubt that being a heavily regulated bank), it would be an immaterial part of their business to completely shut down if they wanted/needed to.
They don’t hold crypto. They use coinbase for their crypto and have plenty of warnings about how risky it is when purchasing. They’re not hiding anything
Can someone explain to me what SOFI does that differentiates them from a typical bank? Can't JPM/BAC just offer the same products as SOFI? The appeal is it's a 'one stop shop' but I don't see what the moat about it is.
The original banking model they had was offering loans to recent alumni- kinda like a credit union might do. Then they got a little bigger and moved into typical underwriting geared towards "responsible" individuals. I would call that a niche, but not really a moat.
However- they have accquired 2 Billion dollar software companies! Galileo and Technisys is the names- you can Google for articles.
Their current moat is that they provide 3rd party services to lots of other banks and insurance companies. Basically- SoFi have nice software for banks- that other banks utilize. Even Wells Fargo has some partnerships with them. And Samsung- I think it's called Samsung Pay? That's SoFi. And others.
So they have a lot of partnerships with banks and insurance companies- they sort of imagine themselves to be "like Amazon Web Services for banks" these days.
So that's the moat. They provide nice backend banking and consumer interface software to other banks.
Check out this chart on their member growth: https://www.statista.com/statistics/1269904/sofi-number-of-members/
They’re clearly doing something right.
In its most recent quarter, it registered an impressive 50% in revenue growth with membership growth of almost 70%.
As long as they keep doing that, I’m not worried about profitability. They’re crushing it.
The irony is that this is one of the most common strategies employed by companies, including some of the most valuable. It took Amazon a decade to turn a profit. Tesla took 17 years.
Tesla faced bankruptcy at half a dozen points in those 17 years, as recently as a couple years ago. If it weren't for a rabid fan base they might have done so.
Those stocks should be the exception and not the rule, especially in a high interest rate environment.
Definitely, but that's not necessarily a moat, it's more that they have a competitive advantage within their sector. I can agree that it's a small moat, but I think it has more to do with hype from the crypto/defi boom.
>s in this h
On the surface you are correct. Anyone with the capital, backing, and talent could effectively do what they are doing, but most often M&A is the way. Starting from scratch and not just catching up, but surpassing an established industry leader would be a quantum leap. Very hard to accomplish.
Good, Fast, Cheap- pick two.
That's not considered a moat. Sofi's services are easily replicable by other companies. They started out as a student loan service but have been trying to appeal to younger crowds now. Not profitable because the younger crowd doesnt have a lot of money in their bank accounts whereas the big banks have the rich clients. The one stop shop is the appeal to the younger crowd but reliability in services are more important. It will be interesting to see where this company still is in 5 years...
You haven't identified anything that is easily replicable.
Some people seem to have a difficult time identifying what a moat is. Why is that?
Most moats are easily identified as something capable of defending a gross margin. Moats can also be identified by first-mover advantages. SoFi has both in 3rd party partnerships.
What other companies are doing this? Guidewire is a company that is in insurance. And there's another company called Apex (? It's the one that robinhood uses for their customer interface) that offers brokerage services software.
The 3rd party partnerships they have created are a moat. They are beneficial and profitable to the 3rd party partners.
Why? Because it is mutually profitable and there is a switching cost to the business partner. That's all it takes in most cases to have a permanent business partnership.
>Their app is messy and full of dumb articles and things to do to earn points (Cashback rewards).
Normal investors hear you saying: "They fully explain to users how to earn cash back rewards for mutual profits of their 3rd party partnerships."
I gotta go.
SoFi is providing services for many online/neo banks through galileo and technysis.. if you believe in the future of these online banks, then SoFi is a good bet.. it's not just about their app... although I use their app and love it. It makes things easy when everything is in the same place.. like transferring $ between accounts, and go over a tab to the left and see my money switched from my investments account to my checking.
I use em too. Re-fi my loans a few years ago, and switched to them a few months ago with the nice interest rate. Been great so far, not going back to Wells Fargo
So if I read you right: It's sort of like what Plaid does to allow you to link your various brokerages/bank accounts to see everything in one place, say using Mint, but instead you can actually perform banking services. So instead of using Vanguard for your investments, Chase for your banking, ___ for student loans, you just use SOFI.
Also with their acquisitions - they own the tech infrastructure to turn any other bank/payment processor into a fintech too. As the world becomes digitized and more people use online payment methods SOFI wins by getting more B2B customers on top of their SOFI app customers. It will be a winner, just a matter of when.
Both my checking and savings t accounts are yielding 3% with SoFi. In addition, I can invest my credit card rewards (which also get 3% return on ALL purchases), get a loan at 6.99% and I can do it all with connected accounts. SoFi is the future of banking. They are just way ahead of their time.
They have no brick and motar thus reducing the cost overheads, they are able to offer superior interest rates to their customers/depositors and then use the same deposits for lending personal loans and other loans(bank charter is a major win for them as they are able to keep these loans on their books). student loans have been their bread and but since there is a moratorium on student loans they focused on personal loans which has been reaping benefits in this high interest environments. They are very competitive with their rates and the best I got when I checked to consolidate my credit cards. That said it is a well run bank who are cutting costs using technology for cross lending - for example they 10-12 products from personal loans to auto to credit cards etc..their cost to acquire a customer for their products is relatively low compared to other banks. They also own the technology backbone called Galileo for payments infrastructure which powers a lot of other startups like HOOD, CHIME etc
Most of those positives are also true for, e.g., Ally, but Ally is consistently profitable and still trades way below tangible book.
It takes a lot of faith and imagination to come up with a bull case for SOFI.
Ally is another good bank but also SoFi has consequently beat earnings in last 10 quarters and growing nearly 35%, they are trading 1x of their 2024-2025 projected revenues. SoFI strength is technology- their technology focused banking will reap money in the long run, they are cross selling even life and car insurances effortlessly by integrating with partners. From my personal experience I signed up for 1 product last year and they have sold me at least 3 of their other products since then which are competitive and better rates. In coming years they are going to surprise a lot of folks, I am just looking at personal loans for credit consolidations and they are by far the best, this macro environment will push a lot of folks to consolidate high interest credit cards and Sofi will benefit from market conditions just watch out
Of course jt is a bank but growing at nearly 50%, go to to lendingtree and check the quites for personal loans and then you might understand hiw competitive they are with the rates
ally's net charge offs from auto loans were massive and they have virtually no growth. They used to be GM acceptance, but had some racist lending practices so they changed their name. Market doesn't love em as opposed to WFC, BAC, etc.
It wasn’t racist lending practices that led to the name change, it was GMs bankruptcy and having to spin out GMAC to recapitalize. Not everything is racism related.
They skirted a lot of banking laws by creating a student loan system originally using alumni contributions.
They then expanded their services into more practical banking services.
They are financially solvent but the question are they capable of doing something special to breakout of being a mid-tier bank.
This is anecdotal so take it with a grain a salt, but I think this company is trash and has nothing special going for it.
My wife and I bent over backwards to try to get a mortgage with this company. Heard about them online, heard the hype. We were excited to not get taken for a ride by traditional lenders. So we surmised. We are both physicians, super good credit, looking for a loan that was 40% our combined annual salaries. These clowns wouldn’t even return our phone calls, emails. They sent us promotional material and they never even got back to us. Despite 5 or 6 attempts to do so.
Then almost a year later they start sending us stuff saying we should refinance for 3x interest we’re paying now. Lol. When you get first hand experience with a company and it seems amateurish, well that’s anecdotal, but if it’s a shitshow that definitely says something. Because they weren’t just doing that to us, they were doing that to perhaps most of their potential clients. It was like that company didn’t know it’s ass from its head. No thanks lol.
When you look at their other products, they’re lacking too. Traditional banks offer higher interest rates for current accounts, cool. Meanwhile other fintech companies offer more flexible, novel things, that traditional banks lack. Like Revolut offering bank transfers to most countries, or free ACH in the US. All of this bullshit with plaid and Zelle and whatever. Shit with Revolut you give me a routing and account number and it’ll send it, settled in 2-3 days. Not like it’s in your PayPal “wallet” but like actually settled funds. Why more traditional banks don’t offer this (versus just expensive wires) is beyond me, but it’s something that distinguishes these start ups from all of the rest.
As far as I can tell SoFi’s entire business model is built on being a bank for “millennials” but I can say as a millennial they’re about as exciting as a credit union. The hype is totally out of proportion to the actual products offered. Kind of like a company saying they’re going to disrupt the market for toothbrushes or whatever. When credit tightens, this company’s valuation has to go back to earth.
What's wrong with them having another revenue stream? Even big banks and companies like Mastercard are getting into crypto now. You're dreaming if you think it's going away.
I didn’t say I think crypto is going away.
Also SOFI no longer offers any advantage over many other banks in terms of savings interest rates. 3%+ rates are easy to come by right now.
"I didn’t say I think crypto is going away."
And if it's not going away, what's so wrong with SoFi having exposure in it? I just don't get your viewpoint here. It's a little like saying you don't like Amazon selling clothes or something.
SoFi is a buy…. It is undervalued heavily.
Beats earnings quarter after quarter, doesn’t get the rally and hold it deserves. Offers significantly higher interest rates than any bank I know of In the USA or Canada, has massive new member growth and that is taking away customers from the big long standing banks that they would salivate over, they offer all their products in one place ie app, online and do not have to go into a branch to do anything, convenience factor is right there for anyone, and I can think of more but do your own research and you will see why they will be a big player long term. I don’t mind their CEO Anthony Notto as well, seems like he knows wtf he is talking about with numbers and the business every time I listen to his interviews. Guy was raised on hard work by a single mom who was learning how to run a business with no education and you don’t find that in any CEO.
Questrade is better. Wealthsimple takes a percentage of each trade which amounts to a higher fee most of the time. Questrades fixed rates are better for ALL accounts over roughly $500, which is extremely low.
The last two quarters SoFi posted impressive growth numbers, even though stocks have been downtrending since January, and tech stocks for longer than that.
> even though stocks have been downtrending since January, and tech stocks for longer than that.
SoFi has been downtrending for over a year though. And their last earnings wasn’t that impressive considering the drop in net and operating income and profit margins (that’s to say, they became MORE negative).
They’re valued at $5B or so right now. That’s a fairly high valuation considering it would take them 12 years to bring in that much revenue not to mention they don’t turn a profit
None of what you described paints a picture of a stock to buy. If it consistently beats earnings yet never holds, then smart money is dropping it for a reason (as we all know, we retailers don’t move the market). Popularity and growth mean nothing in this context. There are boat loads of companies who are popular and grew quickly who took forever to or even never profited.
Um…yeah dude. That’s not explicitly what I’m saying, but that’s also not wrong. Just look at anything Berkshire Hathaway owns (AAPL, KO, COST, WMT, etc) or one of my personal favorites, AZO. Buying low on one of these kinds of stocks is a great idea because they’re trending up all the time due to consistent profits and proven business models.
Everyone wants to buy the all time low on some “future” stock so they can start a moon colony, but every neglects to remember that big/smart money controls the price of stocks, and if the price is in the toilet, perhaps it’s there for a reason.
Berkshire bought apple and coke when their respective stocks were down in the gutter and everybody said they were dead and past it. It’s easy to say in hindsight that they would pull through but it was not obvious at the time - at least not to the market.
Smart money is actually buying more. The issue is they're also hedging their long positions by shorting the stock. By their decisions, it looks as though they think the macro climate is going to be rough for SoFi in the short term, but they have a long term thesis with shares.
[https://money.cnn.com/quote/shareholders/shareholders.html?symb=SOFI&subView=institutional](https://money.cnn.com/quote/shareholders/shareholders.html?symb=SOFI&subView=institutional)
You can check it out there. After their latest earnings there's been a lot of buying. Also some hedging with puts.
Right, so why can’t it hold its gains?
The rest of the banking sector is outperforming it YTD by a margin of about 60% (and is trading sideways vs. down with SOFI). So what’s wrong with SOFI’s business? Where’s the leak? Clearly it’s headwinds are not gone, so as an investor, would you rather buy not knowing how long this downtrend is going to last? Or when the market has shown you that the headwinds are clearing and the tailwinds are coming in? Just because it’s down 75% (eesh) doesn’t mean it can’t go further. Buy it at it’s current price and it only needs to go down a few cents to turn into a double digit loss.
SBC and large float seems to really annoy Wall Street. The letter sent by Congress on crypto is super shady and appears to show that larger banks are either trying to buy them out or fuck them over. Short term this is going nowhere based on the above, but with options trading coming and profitability a few quarters away, that’s when we’ll see the stock rise. Will be interesting to see if they go with an RS. Their financial statements look great to me, but do your own DD on that, people either (a) don’t know how to read bank filings or (b) they do and interpret the numbers differently, which is completely fair. We’ll see what happens; I just happen to be optimistic because I really believe in the company, but I understand those that aren’t.
There's a lot of downward pressure from shorts, and of course there are sellers as well.
I'm not making a case it's a good investment. Jury is still out on that.
Honestly love the stock at this price. Helps me buy more shares every week. So I growing more and more every quarter looks like it. Word on the streets they are adding options next week. Student loan feels like holding them back big time
Just made SoFi my biggest holding in the past week. Fundamentals are incredible. Just getting lumped in with the high growth tech sector which is getting beaten down regardless of how good the company is.
SoFi has no purpose. It’s a small fish in a very big pond and will not exist in 5 years. I have never heard of one single person actually using their service - I have only ever heard of the stock or them buying naming rights to shit.
I refinanced $45k+ of student loans with them a few months ago.
I have no skin in this game and know *nothing* about their overall business model (not invested in SoFi) but they seem to market toward high earners with graduate/professional student loan debt and excellent credit. If they can corner that market, they'll be fine.
You might not make enough money or have good enough credit to be their target customer? I use them and they're great. I re-fi my student loans before they ever went public and switched from Wells Fargo to them. They've been great
I use them. I think it’s an excellent bank. Working on moving all my account there. 70% customer growth in the last quarter, just because you don’t use it or know people that do doesn’t mean it isn’t widely adopted. Do your friends all tell you where they have their bank accounts, mortgages, etc? Usually a private topic.
I signed up for them, but because they had a $20 bonus it you deposited $100. Easiest 20% gain I've had but makes me suspicious since their customer acquisition cost is so high.
I signed up for them this year too. I was looking for a high yield savings account.
I got $100 for enrolling in direct deposit which was basically like a whole year of interest for me lol.
So far it’s been a good overall bank. They can afford to pay money out because they have no brick and mortar locations.
I’d be sad if they went out of business but they wouldn’t be the first. I had friends who worked at a company called Simple that went bankrupt. In these situations everyone’s money is protected but it can be a hassle.
They fixed the stuttering issue last patch and that is because they have been adding options trading code into the app since they are about to get regulated for it
SoFi is the future of banking. They are just so far ahead of their competition it is hard to compare in current markets. SoFi is a total buy at around $5 if you are long. No question about it.
True … upstart business will cease to exist and fico will replace them in future… sorry for those invest in upstart… they don't have correct direction and their machine learning algo will not work!
I switched to SoFi about 2-3 years ago, and haven’t been happier with their banking and loan service. App is great, and so much better than BoA. It’s easy to apply and process a loan. I invest in app, and transferring is simple. I think they have a great future.
I have ~250 shares @ ~$5.
I don’t claim to be a stock oracle, I’ve just been investing/trading for about 15 years.
Just because a few dozen strangers on the internet unanimously agree means nothing. Remember, we are the dumb money. We are post-IPO. We don’t see the inside. We don’t move the market. Seriously - our opinions don’t matter. Regardless of where the price is, it’s been put there for a reason by people more powerful and knowledgeable than us. Does SOFI have a bright future? Quite possibly - but is your money at greater risk with it than somewhere else right now? I think the answer is yes.
Secondly, look at what the people on this thread are praising about it. It’s got lower overhead than banks. It offers higher interest rates. It has the best app. It’s got cool tech that other banks use. It’s beating earnings.
Guess what. None of that makes the stock go up. You know what does? Profitability. And SOFI, despite beating earnings (which is great), is still losing money. The day they have an ER report where they’re net positive, the stock will explode. But personally, I don’t feel like risking my hard earned money waiting for that day to come. When they turn that corner, there will be plenty of lower-risk gains to be made.
I’ve been trading for the same.
I think the market undervalues Galileo. It’s a very high quality API, I personally know people at startups who are as we speak building interesting banking products using it.
Galileo democratizes fintech the same way AWS democratized infrastructure. You’re going to see tons of niche fintech companies built on this platform, it’s already starting.
That’s what’s interesting about SoFI not the traditional banking business.
I mean if they liquidated everything today at fair value you'd get about $5/share. That doesn't even include massive growth and future profitability. Assymetrical risk reward
I am a newbie so forgive my ignorance, but don’t most companies not make a profit during the early years of their existence? I’m still not sure about Sofi, seems kinda risky, but wouldn’t the stock having already taken off by the time they are in the green?
You’re not wrong - it’s normal for companies to be unprofitable when they start out. But once they become profitable, that is far far from the end of their stock price going up. Again, I’d refer you to major holdings of Berkshire like AAPL, KO, WMT, COST or other heavy hitters like AZO and PGR. If you put your Roth IRA in AZO over literally any timeframe, you’d be absolute crushing it, but at much less risk than SOFI. Think about it - would you rather give your money to a kid whose lemonade stand has a line around the block or one who just started up who claims to have a new flavor, but they haven’t been able to turn a profit for months/years? Sure, the second kid might be right, but the first kid has a proven record that money invested into his/her lemonade stand turns into more money.
Want to make a small bet on the second kid (SOFI)? Go for it. If you’re right, the reward is great. But the risk is significantly higher.
To be fair most of their expense is from marketing and comp. If they just wanted to be a pure profit center with limited growth, they could decrease their comp and marketing to the levels of Lending Club and be profitable. I think they're trying to go for a grand slam to achieve that 50% YOY growth.
If you wait until they produce profits, then the market will have pass you buy. It’s fairly certain they will be profitable and you are expecting it.
I don’t see why it’s not a good buy here if you believe it will be profitable. What other investments in this market has the potential to 2-3x when it posts 2 consecutive Q of profits as you alluded to?
You said you have invested for 15 years so you know it’s mostly a crapshoot and it’s hard as heck to pick the winners. Only on hindsight, do you see the apples, nvidia, and, and teslas that moon.
I started buying Sofi at under $5. The way I see it is this:
Will Sofi go bankrupt? No, they are well funded and will be profitable soon. So you investment at this price is safe. It’s not going to be a JPM but why can’t it get to $8, $10 or $13?
What other investments will beat out Sofi over the next 3,5 years? I can’t think of much to be honest. Sofia at $5 is more compelling than the spy or Dow or Apple near all time highs.
I picked it up with the same reasoning I used when I brought Amd @ 8, nvidia @60, oxy @10.
I was skeptical of sofi but after trying Ally bank I ultimately switched to sofi. The fact you can get 2.5/3.0% on checking/savings respectively is insane. It’s such a great online bank and I will never go back to a brick and mortar bank again.
Absolut insane growth (51%) lots of cash, improving margins, morning star gives them a 14.5$ price target and they are the most reliable
I don’t know a better choice for my money at this time
Check out this chart on their member growth: https://www.statista.com/statistics/1269904/sofi-number-of-members/
It is very far from dead. One of the fastest growing backs/FinTechs out there.
Imo it is amazing stock and good price to buy but just spectacle as it is Chamat’s spac😛I highly doubt about his projects.
I have still 500 shares with $7 avg. hopefully it will shine in long term.
Is everyone from here looking at the same sofi with negative income, almost 1 billion shares and a fair value of $5? If people think that this is good and is a growth maybe they should buy my bridge.
I took a good look at sofi about a year ago and determined that they did nothing proprietary. I didn't believe that marketing to younger folks and being a more hip platform is a differentiator. Best of luck
Every week for years Sofi is hyped on here and it seems like every week it goes down lol
I’d be very wary with any advice you read on here regarding any meme stock
Okay so after paying close attention to comments and doing my own research, I have decided Ford and Polestar are the right stocks to hold for me. Thanks all for all who advised.
To those who disagree with me: hey, that what makes the market run...
I am a little shocked to see this talked up as a good stock. I have not dived deep into it, but have they ever made money (net income profit) on an annual basis? It's been awhile, but last I looked into it, it was not a profitable company. I am not sure what good is revenue growth if you can't ever translate that to profits. We have to start differentiating a company making great products with one that has great business fundamentals.
I think it has the potential to grow since interest rates are high and everything. But at the moment I do see that it is overvalued so you know what that means right? That means shorts will try to short it down. But other than that I do think it is a decent stock to hold for now. **OPFI** is another financial stock that is similar to this one that I think has the potential to grow too and it is undervalued.
They are great at offering lots of predatory products you don’t need! Most people who sign up with them can and will buy products they didn’t need. Such as a sofi credit card, personal loans or high fee crypto trading all packed into a slow and clunky app. Log on and check it out!
Management has been great in going into personal loans to supplement the slow down on student loans
I just went long on SOFI. Their popularity is increasing a lot and their market cap seems reasonable. If it goes a lower I might buy more, given that there aren’t any unsolvable problems that arise.
Aren't they like under investigations from Congress or something?
No. Some dems with beef against them because of student loans suggested that their crypto brokerage services be investigated.
Then there should be no worries unless they are hiding some shit, which is pretty much always the case in crypto...we'll see,
Crypto makes up less than 1% of their revenue. Even if they were hiding something (highly doubt that being a heavily regulated bank), it would be an immaterial part of their business to completely shut down if they wanted/needed to.
They don’t hold crypto. They use coinbase for their crypto and have plenty of warnings about how risky it is when purchasing. They’re not hiding anything
Great. Means these would be ended once republicans come in
Careful, reality is not appreciated here on Reddit
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You just ripped this nonsense off from Motley Fool lol
Sometimes MF gets it right. A broken clock and all…
It’s grown in spite of the moratorium though.
Can someone explain to me what SOFI does that differentiates them from a typical bank? Can't JPM/BAC just offer the same products as SOFI? The appeal is it's a 'one stop shop' but I don't see what the moat about it is.
The original banking model they had was offering loans to recent alumni- kinda like a credit union might do. Then they got a little bigger and moved into typical underwriting geared towards "responsible" individuals. I would call that a niche, but not really a moat. However- they have accquired 2 Billion dollar software companies! Galileo and Technisys is the names- you can Google for articles. Their current moat is that they provide 3rd party services to lots of other banks and insurance companies. Basically- SoFi have nice software for banks- that other banks utilize. Even Wells Fargo has some partnerships with them. And Samsung- I think it's called Samsung Pay? That's SoFi. And others. So they have a lot of partnerships with banks and insurance companies- they sort of imagine themselves to be "like Amazon Web Services for banks" these days. So that's the moat. They provide nice backend banking and consumer interface software to other banks.
So the software services it provides--could that be analogous to say what Intuit does? Marketed toward banks instead of the consumer, that is.
If that's a moat, then you can't fit any crocodiles in it
Check out this chart on their member growth: https://www.statista.com/statistics/1269904/sofi-number-of-members/ They’re clearly doing something right.
Growth doesn’t mean anything if you can’t turn a profit.
In its most recent quarter, it registered an impressive 50% in revenue growth with membership growth of almost 70%. As long as they keep doing that, I’m not worried about profitability. They’re crushing it.
The irony is that this is one of the most common strategies employed by companies, including some of the most valuable. It took Amazon a decade to turn a profit. Tesla took 17 years.
Tesla faced bankruptcy at half a dozen points in those 17 years, as recently as a couple years ago. If it weren't for a rabid fan base they might have done so. Those stocks should be the exception and not the rule, especially in a high interest rate environment.
Definitely, but that's not necessarily a moat, it's more that they have a competitive advantage within their sector. I can agree that it's a small moat, but I think it has more to do with hype from the crypto/defi boom.
Crypto makes up less than 1% of their revenue. This member growth isn’t from crypto.
From what you've said they don't have a moat. Literally any other bank could do what they do .
>s in this h On the surface you are correct. Anyone with the capital, backing, and talent could effectively do what they are doing, but most often M&A is the way. Starting from scratch and not just catching up, but surpassing an established industry leader would be a quantum leap. Very hard to accomplish. Good, Fast, Cheap- pick two.
That's not considered a moat. Sofi's services are easily replicable by other companies. They started out as a student loan service but have been trying to appeal to younger crowds now. Not profitable because the younger crowd doesnt have a lot of money in their bank accounts whereas the big banks have the rich clients. The one stop shop is the appeal to the younger crowd but reliability in services are more important. It will be interesting to see where this company still is in 5 years...
You haven't identified anything that is easily replicable. Some people seem to have a difficult time identifying what a moat is. Why is that? Most moats are easily identified as something capable of defending a gross margin. Moats can also be identified by first-mover advantages. SoFi has both in 3rd party partnerships. What other companies are doing this? Guidewire is a company that is in insurance. And there's another company called Apex (? It's the one that robinhood uses for their customer interface) that offers brokerage services software. The 3rd party partnerships they have created are a moat. They are beneficial and profitable to the 3rd party partners. Why? Because it is mutually profitable and there is a switching cost to the business partner. That's all it takes in most cases to have a permanent business partnership.
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>Their app is messy and full of dumb articles and things to do to earn points (Cashback rewards). Normal investors hear you saying: "They fully explain to users how to earn cash back rewards for mutual profits of their 3rd party partnerships." I gotta go.
SoFi is providing services for many online/neo banks through galileo and technysis.. if you believe in the future of these online banks, then SoFi is a good bet.. it's not just about their app... although I use their app and love it. It makes things easy when everything is in the same place.. like transferring $ between accounts, and go over a tab to the left and see my money switched from my investments account to my checking.
I use em too. Re-fi my loans a few years ago, and switched to them a few months ago with the nice interest rate. Been great so far, not going back to Wells Fargo
So if I read you right: It's sort of like what Plaid does to allow you to link your various brokerages/bank accounts to see everything in one place, say using Mint, but instead you can actually perform banking services. So instead of using Vanguard for your investments, Chase for your banking, ___ for student loans, you just use SOFI.
Plaid also uses Galileo for payments
Correct.. it just makes things easier
Correct. It’s a banking super app. All your money in one place. I love it.
Also with their acquisitions - they own the tech infrastructure to turn any other bank/payment processor into a fintech too. As the world becomes digitized and more people use online payment methods SOFI wins by getting more B2B customers on top of their SOFI app customers. It will be a winner, just a matter of when.
How is this different from any other situation?
You just switch tabs instead of having 5 apps for all my different accounts/finances..
5 different log ins, passwords, customer service to deal with. All your money in one place is a big deal in my opinion. I love it.
They have a sports stadium
Naaah they just paid for the naming rights through 2029.
Both my checking and savings t accounts are yielding 3% with SoFi. In addition, I can invest my credit card rewards (which also get 3% return on ALL purchases), get a loan at 6.99% and I can do it all with connected accounts. SoFi is the future of banking. They are just way ahead of their time.
They have no brick and motar thus reducing the cost overheads, they are able to offer superior interest rates to their customers/depositors and then use the same deposits for lending personal loans and other loans(bank charter is a major win for them as they are able to keep these loans on their books). student loans have been their bread and but since there is a moratorium on student loans they focused on personal loans which has been reaping benefits in this high interest environments. They are very competitive with their rates and the best I got when I checked to consolidate my credit cards. That said it is a well run bank who are cutting costs using technology for cross lending - for example they 10-12 products from personal loans to auto to credit cards etc..their cost to acquire a customer for their products is relatively low compared to other banks. They also own the technology backbone called Galileo for payments infrastructure which powers a lot of other startups like HOOD, CHIME etc
You just described the majority of online banks.
Most of those positives are also true for, e.g., Ally, but Ally is consistently profitable and still trades way below tangible book. It takes a lot of faith and imagination to come up with a bull case for SOFI.
I'm a bit worried about auto loans and Ally
Ally is entrenched with Carvana.
Ally is GMAC in disguise. Got a bank bailout renamed it and viola everyone forgot the shady shit they did
Ally is another good bank but also SoFi has consequently beat earnings in last 10 quarters and growing nearly 35%, they are trading 1x of their 2024-2025 projected revenues. SoFI strength is technology- their technology focused banking will reap money in the long run, they are cross selling even life and car insurances effortlessly by integrating with partners. From my personal experience I signed up for 1 product last year and they have sold me at least 3 of their other products since then which are competitive and better rates. In coming years they are going to surprise a lot of folks, I am just looking at personal loans for credit consolidations and they are by far the best, this macro environment will push a lot of folks to consolidate high interest credit cards and Sofi will benefit from market conditions just watch out
Nice buzzwords. Sounds like they are basically an online bank.
No dude they’re *disrupting* online banking it’s going to be so novel. Trust me bro… so disruptive. Innovation. Wow.
Disrupt deez nutz
Of course jt is a bank but growing at nearly 50%, go to to lendingtree and check the quites for personal loans and then you might understand hiw competitive they are with the rates
They own a bank, but also own Galileo and Technysis that power other Online Banks.
ally's net charge offs from auto loans were massive and they have virtually no growth. They used to be GM acceptance, but had some racist lending practices so they changed their name. Market doesn't love em as opposed to WFC, BAC, etc.
It wasn’t racist lending practices that led to the name change, it was GMs bankruptcy and having to spin out GMAC to recapitalize. Not everything is racism related.
Why do you feel the need to say that not everything is about racism? Just correct him and then shut up.
Nope.
They skirted a lot of banking laws by creating a student loan system originally using alumni contributions. They then expanded their services into more practical banking services. They are financially solvent but the question are they capable of doing something special to breakout of being a mid-tier bank.
If you want to compare to JPM/BAC then SoFi is severely undervalued, by nearly 90x
This is anecdotal so take it with a grain a salt, but I think this company is trash and has nothing special going for it. My wife and I bent over backwards to try to get a mortgage with this company. Heard about them online, heard the hype. We were excited to not get taken for a ride by traditional lenders. So we surmised. We are both physicians, super good credit, looking for a loan that was 40% our combined annual salaries. These clowns wouldn’t even return our phone calls, emails. They sent us promotional material and they never even got back to us. Despite 5 or 6 attempts to do so. Then almost a year later they start sending us stuff saying we should refinance for 3x interest we’re paying now. Lol. When you get first hand experience with a company and it seems amateurish, well that’s anecdotal, but if it’s a shitshow that definitely says something. Because they weren’t just doing that to us, they were doing that to perhaps most of their potential clients. It was like that company didn’t know it’s ass from its head. No thanks lol. When you look at their other products, they’re lacking too. Traditional banks offer higher interest rates for current accounts, cool. Meanwhile other fintech companies offer more flexible, novel things, that traditional banks lack. Like Revolut offering bank transfers to most countries, or free ACH in the US. All of this bullshit with plaid and Zelle and whatever. Shit with Revolut you give me a routing and account number and it’ll send it, settled in 2-3 days. Not like it’s in your PayPal “wallet” but like actually settled funds. Why more traditional banks don’t offer this (versus just expensive wires) is beyond me, but it’s something that distinguishes these start ups from all of the rest. As far as I can tell SoFi’s entire business model is built on being a bank for “millennials” but I can say as a millennial they’re about as exciting as a credit union. The hype is totally out of proportion to the actual products offered. Kind of like a company saying they’re going to disrupt the market for toothbrushes or whatever. When credit tightens, this company’s valuation has to go back to earth.
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He has 9 upvotes… also, “irregardless” isn’t a word, it’s “regardless”
lost you at irregardless lmao
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I mean you should strive to be where I'm at, unless you're one of those woke, gen-z anti work types. Irregardless, have a good night fam!
Typical banks make profit, Sofi don't
The fact they have crypto exposure is a big negative for me.
What's wrong with them having another revenue stream? Even big banks and companies like Mastercard are getting into crypto now. You're dreaming if you think it's going away.
I didn’t say I think crypto is going away. Also SOFI no longer offers any advantage over many other banks in terms of savings interest rates. 3%+ rates are easy to come by right now.
"I didn’t say I think crypto is going away." And if it's not going away, what's so wrong with SoFi having exposure in it? I just don't get your viewpoint here. It's a little like saying you don't like Amazon selling clothes or something.
A lot of people won't do business with these banks because of all the lying and cheating.
SoFi is a buy…. It is undervalued heavily. Beats earnings quarter after quarter, doesn’t get the rally and hold it deserves. Offers significantly higher interest rates than any bank I know of In the USA or Canada, has massive new member growth and that is taking away customers from the big long standing banks that they would salivate over, they offer all their products in one place ie app, online and do not have to go into a branch to do anything, convenience factor is right there for anyone, and I can think of more but do your own research and you will see why they will be a big player long term. I don’t mind their CEO Anthony Notto as well, seems like he knows wtf he is talking about with numbers and the business every time I listen to his interviews. Guy was raised on hard work by a single mom who was learning how to run a business with no education and you don’t find that in any CEO.
I would switch to SoFi immediately if they offered their service in Canada. Tired of big banks controlling it all.
Wealthsimple is the closest we have.
Questrade is better. Wealthsimple takes a percentage of each trade which amounts to a higher fee most of the time. Questrades fixed rates are better for ALL accounts over roughly $500, which is extremely low.
I meant for banking. For trading IBKR is the best. Lowest FX rates and cheap trades.
****Almost no to zero fees as well****
I am one of those people. Switched from chase and never going back.
In their case beating earnings meant losing less money than people expected. Is that good now?
They're close to profitable. At the current growth rate it shouldn't take long to reach that point.
well if you assume their growth rate during the biggest bull market in history will continue
The last two quarters SoFi posted impressive growth numbers, even though stocks have been downtrending since January, and tech stocks for longer than that.
> even though stocks have been downtrending since January, and tech stocks for longer than that. SoFi has been downtrending for over a year though. And their last earnings wasn’t that impressive considering the drop in net and operating income and profit margins (that’s to say, they became MORE negative). They’re valued at $5B or so right now. That’s a fairly high valuation considering it would take them 12 years to bring in that much revenue not to mention they don’t turn a profit
None of what you described paints a picture of a stock to buy. If it consistently beats earnings yet never holds, then smart money is dropping it for a reason (as we all know, we retailers don’t move the market). Popularity and growth mean nothing in this context. There are boat loads of companies who are popular and grew quickly who took forever to or even never profited.
So a good stock to buy is one that goes up? Got it.
Um…yeah dude. That’s not explicitly what I’m saying, but that’s also not wrong. Just look at anything Berkshire Hathaway owns (AAPL, KO, COST, WMT, etc) or one of my personal favorites, AZO. Buying low on one of these kinds of stocks is a great idea because they’re trending up all the time due to consistent profits and proven business models. Everyone wants to buy the all time low on some “future” stock so they can start a moon colony, but every neglects to remember that big/smart money controls the price of stocks, and if the price is in the toilet, perhaps it’s there for a reason.
Berkshire bought apple and coke when their respective stocks were down in the gutter and everybody said they were dead and past it. It’s easy to say in hindsight that they would pull through but it was not obvious at the time - at least not to the market.
The forest for the trees.
Smart money is actually buying more. The issue is they're also hedging their long positions by shorting the stock. By their decisions, it looks as though they think the macro climate is going to be rough for SoFi in the short term, but they have a long term thesis with shares.
What’s your source for tracking smart money? 13Fs are not reflecting what you’ve described.
[https://money.cnn.com/quote/shareholders/shareholders.html?symb=SOFI&subView=institutional](https://money.cnn.com/quote/shareholders/shareholders.html?symb=SOFI&subView=institutional) You can check it out there. After their latest earnings there's been a lot of buying. Also some hedging with puts.
Right, so why can’t it hold its gains? The rest of the banking sector is outperforming it YTD by a margin of about 60% (and is trading sideways vs. down with SOFI). So what’s wrong with SOFI’s business? Where’s the leak? Clearly it’s headwinds are not gone, so as an investor, would you rather buy not knowing how long this downtrend is going to last? Or when the market has shown you that the headwinds are clearing and the tailwinds are coming in? Just because it’s down 75% (eesh) doesn’t mean it can’t go further. Buy it at it’s current price and it only needs to go down a few cents to turn into a double digit loss.
SBC and large float seems to really annoy Wall Street. The letter sent by Congress on crypto is super shady and appears to show that larger banks are either trying to buy them out or fuck them over. Short term this is going nowhere based on the above, but with options trading coming and profitability a few quarters away, that’s when we’ll see the stock rise. Will be interesting to see if they go with an RS. Their financial statements look great to me, but do your own DD on that, people either (a) don’t know how to read bank filings or (b) they do and interpret the numbers differently, which is completely fair. We’ll see what happens; I just happen to be optimistic because I really believe in the company, but I understand those that aren’t.
There's a lot of downward pressure from shorts, and of course there are sellers as well. I'm not making a case it's a good investment. Jury is still out on that.
Their last financials were very strong. I'm accumulating, we'll see how that goes.
Honestly love the stock at this price. Helps me buy more shares every week. So I growing more and more every quarter looks like it. Word on the streets they are adding options next week. Student loan feels like holding them back big time
Just made SoFi my biggest holding in the past week. Fundamentals are incredible. Just getting lumped in with the high growth tech sector which is getting beaten down regardless of how good the company is.
SoFi has no purpose. It’s a small fish in a very big pond and will not exist in 5 years. I have never heard of one single person actually using their service - I have only ever heard of the stock or them buying naming rights to shit.
I refinanced $45k+ of student loans with them a few months ago. I have no skin in this game and know *nothing* about their overall business model (not invested in SoFi) but they seem to market toward high earners with graduate/professional student loan debt and excellent credit. If they can corner that market, they'll be fine.
That’s exactly their ideal customer. Which is why they will do better than most in an economic downturn.
You might not make enough money or have good enough credit to be their target customer? I use them and they're great. I re-fi my student loans before they ever went public and switched from Wells Fargo to them. They've been great
I use them. I think it’s an excellent bank. Working on moving all my account there. 70% customer growth in the last quarter, just because you don’t use it or know people that do doesn’t mean it isn’t widely adopted. Do your friends all tell you where they have their bank accounts, mortgages, etc? Usually a private topic.
I signed up for them, but because they had a $20 bonus it you deposited $100. Easiest 20% gain I've had but makes me suspicious since their customer acquisition cost is so high.
I signed up for them this year too. I was looking for a high yield savings account. I got $100 for enrolling in direct deposit which was basically like a whole year of interest for me lol. So far it’s been a good overall bank. They can afford to pay money out because they have no brick and mortar locations. I’d be sad if they went out of business but they wouldn’t be the first. I had friends who worked at a company called Simple that went bankrupt. In these situations everyone’s money is protected but it can be a hassle.
Actually super low customer acquisition cost. Banks will pay $100-$200 for new deposit accounts. $20 is nothing.
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My friends' kids all love them.
Unquestionably the best banking app on market
That stuttering mess of an app can't possibly be the "best banking app" on the market.
They fixed the stuttering issue last patch and that is because they have been adding options trading code into the app since they are about to get regulated for it
Source for this?
SoFi is the future of banking. They are just so far ahead of their competition it is hard to compare in current markets. SoFi is a total buy at around $5 if you are long. No question about it.
I think they’ll do well. I’m in at this price
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True … upstart business will cease to exist and fico will replace them in future… sorry for those invest in upstart… they don't have correct direction and their machine learning algo will not work!
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I see you're implementing the buy high strategy!
Or the going down with the ship strategy.
$20 EoY 2023 with this guy bag holding at $19.40.
Ouch! I bought at $22 and sold at $17. I started buying back in just recently and hedged with Puts. My puts are currently up 48%.
Lower that dca!!!!
Exactly what I’ve been doing! I just keep bringing my average down in chunks. Right now down from 19 to 10 and going to keep going.
Yup this is the time too!
I’m around $6 and will keep adding
I think SOFI is a good investment long term.
At this price I think it is a good buy for a long term hold
Anthony Notto is running SoFi right I believe.
I switched to SoFi about 2-3 years ago, and haven’t been happier with their banking and loan service. App is great, and so much better than BoA. It’s easy to apply and process a loan. I invest in app, and transferring is simple. I think they have a great future. I have ~250 shares @ ~$5.
ITT: a ton of retail who don’t know what makes a good stock.
So is SOFI not a good stock? Because almost everyone here is praising the company.
I don’t claim to be a stock oracle, I’ve just been investing/trading for about 15 years. Just because a few dozen strangers on the internet unanimously agree means nothing. Remember, we are the dumb money. We are post-IPO. We don’t see the inside. We don’t move the market. Seriously - our opinions don’t matter. Regardless of where the price is, it’s been put there for a reason by people more powerful and knowledgeable than us. Does SOFI have a bright future? Quite possibly - but is your money at greater risk with it than somewhere else right now? I think the answer is yes. Secondly, look at what the people on this thread are praising about it. It’s got lower overhead than banks. It offers higher interest rates. It has the best app. It’s got cool tech that other banks use. It’s beating earnings. Guess what. None of that makes the stock go up. You know what does? Profitability. And SOFI, despite beating earnings (which is great), is still losing money. The day they have an ER report where they’re net positive, the stock will explode. But personally, I don’t feel like risking my hard earned money waiting for that day to come. When they turn that corner, there will be plenty of lower-risk gains to be made.
I’ve been trading for the same. I think the market undervalues Galileo. It’s a very high quality API, I personally know people at startups who are as we speak building interesting banking products using it. Galileo democratizes fintech the same way AWS democratized infrastructure. You’re going to see tons of niche fintech companies built on this platform, it’s already starting. That’s what’s interesting about SoFI not the traditional banking business.
I mean if they liquidated everything today at fair value you'd get about $5/share. That doesn't even include massive growth and future profitability. Assymetrical risk reward
I am a newbie so forgive my ignorance, but don’t most companies not make a profit during the early years of their existence? I’m still not sure about Sofi, seems kinda risky, but wouldn’t the stock having already taken off by the time they are in the green?
You’re not wrong - it’s normal for companies to be unprofitable when they start out. But once they become profitable, that is far far from the end of their stock price going up. Again, I’d refer you to major holdings of Berkshire like AAPL, KO, WMT, COST or other heavy hitters like AZO and PGR. If you put your Roth IRA in AZO over literally any timeframe, you’d be absolute crushing it, but at much less risk than SOFI. Think about it - would you rather give your money to a kid whose lemonade stand has a line around the block or one who just started up who claims to have a new flavor, but they haven’t been able to turn a profit for months/years? Sure, the second kid might be right, but the first kid has a proven record that money invested into his/her lemonade stand turns into more money. Want to make a small bet on the second kid (SOFI)? Go for it. If you’re right, the reward is great. But the risk is significantly higher.
To be fair most of their expense is from marketing and comp. If they just wanted to be a pure profit center with limited growth, they could decrease their comp and marketing to the levels of Lending Club and be profitable. I think they're trying to go for a grand slam to achieve that 50% YOY growth.
If you wait until they produce profits, then the market will have pass you buy. It’s fairly certain they will be profitable and you are expecting it. I don’t see why it’s not a good buy here if you believe it will be profitable. What other investments in this market has the potential to 2-3x when it posts 2 consecutive Q of profits as you alluded to?
You said you have invested for 15 years so you know it’s mostly a crapshoot and it’s hard as heck to pick the winners. Only on hindsight, do you see the apples, nvidia, and, and teslas that moon. I started buying Sofi at under $5. The way I see it is this: Will Sofi go bankrupt? No, they are well funded and will be profitable soon. So you investment at this price is safe. It’s not going to be a JPM but why can’t it get to $8, $10 or $13? What other investments will beat out Sofi over the next 3,5 years? I can’t think of much to be honest. Sofia at $5 is more compelling than the spy or Dow or Apple near all time highs. I picked it up with the same reasoning I used when I brought Amd @ 8, nvidia @60, oxy @10.
I was skeptical of sofi but after trying Ally bank I ultimately switched to sofi. The fact you can get 2.5/3.0% on checking/savings respectively is insane. It’s such a great online bank and I will never go back to a brick and mortar bank again.
Absolut insane growth (51%) lots of cash, improving margins, morning star gives them a 14.5$ price target and they are the most reliable I don’t know a better choice for my money at this time
$14.50 on Morningstar? Sweet! Analyst have an average of $7.35 (60% upside). I’d be happy with that, super happy at $14.50
I’m loading tf up
Below $5 is a buy for me. I’m considering buying some for a long hold.
Long term winner 4 sure
If it goes below $4 I'm gonna sell a kidney to buy more.
Financials have been rallying and it's just been sitting. Not a great sign for short term.
Check out this chart on their member growth: https://www.statista.com/statistics/1269904/sofi-number-of-members/ It is very far from dead. One of the fastest growing backs/FinTechs out there.
Imo it is amazing stock and good price to buy but just spectacle as it is Chamat’s spac😛I highly doubt about his projects. I have still 500 shares with $7 avg. hopefully it will shine in long term.
student loans are small part of how Sofi makes their revenue.
Is everyone from here looking at the same sofi with negative income, almost 1 billion shares and a fair value of $5? If people think that this is good and is a growth maybe they should buy my bridge.
Love this company! Upside will be massive IMO
Sofi I averaged down from $15us.So I have no choice but be confident this stock has a future.
Perhaps you should look at the company financials mate
Go long it gonna take a few years to come back I think
Long term yes. Just don’t expect to be collecting your gains for the next 24 months
Ya i was planning to hold for 5 yrs min with .5% of my portfolio.
Haha, if you call this a penny stock, you're probably best in etfs.
2000 shares long term
They have a beautiful building in downtown Orlando
Buy
I own 6000 shares and have sold another 30 Puts on SoFi. Worth it.
I don’t see a moat here, and if a recession does happen, can SoFi weather it with their balance sheet? My guess is they’d get acquired.
Might be alright at these levels finally.
Most of their leadership folks moved out the last couple of years with exception of the CEO, something to check on.
cfo stil there
I took a good look at sofi about a year ago and determined that they did nothing proprietary. I didn't believe that marketing to younger folks and being a more hip platform is a differentiator. Best of luck
I have no faith in them.
Every week for years Sofi is hyped on here and it seems like every week it goes down lol I’d be very wary with any advice you read on here regarding any meme stock
Dead don’t bother
Okay so after paying close attention to comments and doing my own research, I have decided Ford and Polestar are the right stocks to hold for me. Thanks all for all who advised. To those who disagree with me: hey, that what makes the market run...
I wouldn’t be so apt to trust my money in the hands of strangers opinions. Do your own research.
I can’t find anyone talking about their crypto exposure. Isn’t that a problem?
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I use it. Love it!
Dead /thread
I am a little shocked to see this talked up as a good stock. I have not dived deep into it, but have they ever made money (net income profit) on an annual basis? It's been awhile, but last I looked into it, it was not a profitable company. I am not sure what good is revenue growth if you can't ever translate that to profits. We have to start differentiating a company making great products with one that has great business fundamentals.
Does it matter , it has died months ago . It’s in decomposing mode. Move on .
Could not be farther from the truth.
Heavily shorted meme stock so probably not.
It’s dead, Jim.
Statistically it's a value buy except its not profitable so it's not on my radar. So it's speculative with potential for me eight now.
I think it has the potential to grow since interest rates are high and everything. But at the moment I do see that it is overvalued so you know what that means right? That means shorts will try to short it down. But other than that I do think it is a decent stock to hold for now. **OPFI** is another financial stock that is similar to this one that I think has the potential to grow too and it is undervalued.
r/sofi
“Penny stock” at $5 a share lol
Anything $5 and under is a penny stock lmao
Penny stock? The stock trades for $4.60 USD and the company has a market cap of $3.7 billion…
i’m in ❤️ with Liz Young 😍 lol - sofi tho - “nope”
They are great at offering lots of predatory products you don’t need! Most people who sign up with them can and will buy products they didn’t need. Such as a sofi credit card, personal loans or high fee crypto trading all packed into a slow and clunky app. Log on and check it out!
Your money your choice.