This newly publicly-traded company has become one of the top online personal finance companies in the US. Here’s what its prospects are like in its second year of public trading.
SoFi Technologies is among the top online personal finance companies in the United States. SoFi is an acronym of Social Finance Inc. The American online personal finance provider offers financial products to its customers. The products include student loan refinancing, mortgages and personal loans. SoFi also offers credit cards, investing and banking. The company is headquartered in San Francisco and has been in operation since 2011.
For investors looking to buy SoFi shares, you probably wonder whether this is a wise option. Here's a review of the prospects for SoFi in the current stock market.
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SoFi share prices in the past five years
Unfortunately, there are no records available for SoFi technologies over the past five years. SoFi officially became a publicly-traded company on 1 June 2021. Since then, Class A common stocks have been available for trading on the Nasdaq Global market. This may be a disadvantage for traders seeking more information on the trading patterns associated with the company. The best way to analyse SoFi's stock value and future trends would be to assess the direct factors affecting the company's share market value.
In 2020, just before SoFi went public, it reported net revenue of US$621 million. The growth increased by nearly 40% compared to the previous year. The company's opening share value was $12.17, with a day high of $12.23 and a day low of $11.17 as of 18 February 2022.
Based on the 10-day average volume, SoFi showed a US$52.73 million yearly value. Currently, SoFi has a market value of US$9.10 billion. As of 6 February 2021, the total shares from the company was a whopping US$799.63 million. As of 2021, the company had a 52-week high of $24.95 and a 52-week low of $10.51.
Considering that this will be the second full year of public trading, predicting a future positive growth pattern is easy.
Contributing factors to the share's past performance
Many factors come into play when assessing the dynamics surrounding a company's stock value. For SoFi technologies, it has been a constant process of learning the factors that directly impact the share prices. For SoFi, investor behaviour has been at the top of the factors affecting the value of the company's stock. Since the company went public, there has been positive investor behaviour, with more investors showing hope around the company share's prospects.
World events are the other major factors that will likely affect share value. The current COVID-19 pandemic is among the world events that hurt share value. Unlike most other companies, SoFi technology has had a positive run during the pandemic. More people opted for digital platforms that minimised physical interactions during the raging COVID-19 related anxiety. The situation catapulted SoFi technology's share value in a major way.
SoFi's stock value will also grow faster based on the current perceived stock valuation for the company. The company's projections earnings and large trades show a positive growth trajectory. While this may change over time, SoFi's prospects currently show a positive shave value trajectory.
SoFi risk assessment
There's a lot to look into with SoFi and the risks that play out for an investor. First, it predicted that the share price liquid and stability might be questionable over the next three months. There will be a volatile share price over the next three months. The patterns also show that there will be significant insider selling during the same period. In both cases, the trends show a failed assessment, indicating a risk for any investor.
However, SoFi shares passed two critical risk assessments. First, SoFi Technology showed a positive profitability trend over the next three years. Perhaps this anticipated growth is a result of its success since it was first publicly listed. The company has shown faster growth than the 1.9% savings rate. Further, SoFi has had an above-average market growth over the last two years compared to other companies. When comparing the revenue versus market dynamics, it's clear that SoFi's revenue will grow at over 26.9% annually over the next five years. The revenue is higher than the 8.9% per year growth witnessed in the broader US market.
Suggested investing approach
It's natural for investors to question whether SoFi technology is a good fit for the market. Over the last few months, SoFi Technology has shown a slower or poorer stock price performance. For instance, at the beginning of November 2021, SoFi's share price had declined by 38%. During the same period, other factors such as the resurgence of the Omicron virus. As a trader or investor, you may need to focus on a specific investing approach.
Over the last three quarters, SoFi has managed to double the total member base. The assessment is based on the year-on-year review of the company's operations. For investors, this shows a positive trend that one can jump as the trends in stock value growth continue. The forward revenue trajectory shows an extent of trust in the share growth prospects for the company.
If you are an investor with SoFi, growth optionality will be paramount in the future. This is more so given the solid growth in all three segments. Investors should pay attention to the upcoming tech selloff. Here, there will be a high likelihood of making profitable investments. For now, SoFi stock remains a buy option for any investor. The stock will deliver growth that's in part due to its vertically integrated platform. With more than a 40% anticipated revenue growth rate, every investor should be eager to jump onto this bandwagon.
Future trend based on upcoming developments
If SoFi can maintain the balance between growth and profitability, then the next three years will be promising years for the company's shares. A recent review of the company shows a median target of 18.0 with highs of 25.0. As the COVID-19 pandemic and the burden it brought eases, there will be positive prospects for SoFi. More students are likely to seek loans even as the demand for personal and mortgage loans grows steadily. These developments will, in turn, escalate SoFi's stock value.
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