Shareholders of SoFi would probably like to forget the past six months even happened. The stock dropped 29.5% and now trades at $18.64. This might have investors contemplating their next move.
Given the weaker price action, is now a good time to buy SOFI? Find out in our full research report, it’s free.
Why Is SoFi a Good Business?
Starting as a student loan refinancing company founded by Stanford business school students in 2011, SoFi Technologies (NASDAQ: SOFI) operates a digital financial platform offering lending, banking, investing, and other financial services to help members borrow, save, spend, invest, and protect their money.
1. Skyrocketing Revenue Shows Strong Momentum
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
Luckily, SoFi’s revenue grew at an incredible 39.1% compounded annual growth rate over the last five years. Its growth surpassed the average financials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
SoFi’s full-year EPS flipped from negative to positive over the last four years. This is a good sign and shows it’s at an inflection point.
Final Judgment
These are just a few reasons SoFi is a high-quality business worth owning. After the recent drawdown, the stock trades at 27.9× forward P/E (or $18.64 per share). Is now a good time to buy? See for yourself in our full research report, it’s free.
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