$SOFI Best Fintech Stock To Invest In?
After House Speaker Kevin McCarthy described the student loan payment pause as “gone” due to the debt ceiling deal, SoFi Technologies, Inc. (NASDAQ: SOFI) seems to be a huge beneficiary of the deal. Since one of SOFI’s core business models is student debt refinancing and it is back on the table, SOFI can now operate at full capacity again after the collapse of student loan originations a few years ago. Now that student loan payments are set to resume soon, SOFI stock could be one to watch closely as the company might reach profitability in Q3 ahead of its expectations of profitability in Q4.
SOFI Fundamentals
Ending months of stalemate, President Biden and House Speaker Kevin McCarthy have reached a tentative deal to suspend the federal government’s $31.4 trillion debt ceiling, ending the state of uncertainty that the U.S. has operated in for the last few months. The new deal means that the banking sector, which SOFI belongs to, can take a break as the U.S. reaches macroeconomic stability. Furthermore, the deal will also see the student loan payments pause gone within 60 days of the deal being signed.
Following the student loan payments resumption, one of SOFI’s main revenue sources from student debt refinancing is back on the table. In 2021, student loans accounted for almost 60% of loans held for sale for SOFI, but as of Q1 2023, student loans accounted for just 32%, while personal loans accounted for nearly 67% of loans held for sale and have seen a 46% increase in originations. Student loan growth stagnation can all be attributed to the pause in student loan payments in 2020.
With the resumption of student loan payments, SOFI can expect to run at full capacity again as the student loan refinance market normalizes. This also suggests that SOFI can expect to reach profitability in Q3 2023 sooner than the forecasted Q4 2023 as Q3 would witness elevated demand for student loan originations.
If the company becomes profitable in Q3, SOFI stock may see a huge jump in its stock price in a similar fashion to Palantir Technologies Inc. (NYSE: PLTR) when it achieved profitability for the first time in Q4 2022. Since then, PLTR stock has climbed by 96% and the same can happen to SOFI stock. If SOFI stock went on a similar run, it could break the $10 mark, which it has not reached for more than a year.
Technical Analysis
SOFI stock’s trend is neutral with the stock trading in a sideways channel between $5.1 and $5.51. Looking at the indicators, the stock is trading above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, the RSI is overbought at 75 and the MACD is bullish.
As for the fundamentals, SOFI stock just witnessed a catalyst in the new debt ceiling deal that would see student loan payments resume within 60 days of being signed into law. As SOFI could now reach profitability in Q3, the current PPS could prove to be a good entry in SOFI stock ahead of its Q3 earnings.
SOFI Forecast
SOFI seems to be in a good spot as it has increased its personal loan originations as its student loan business was almost put on hold, and now with the student loan payments back on the table, SOFI can achieve profitability earlier than expected. In the event that SOFI achieves profitability in Q3, SOFI stock can make a similar run to PLTR and see it break the $10 mark.
SOFI Fundamentals
Ending months of stalemate, President Biden and House Speaker Kevin McCarthy have reached a tentative deal to suspend the federal government’s $31.4 trillion debt ceiling, ending the state of uncertainty that the U.S. has operated in for the last few months. The new deal means that the banking sector, which SOFI belongs to, can take a break as the U.S. reaches macroeconomic stability. Furthermore, the deal will also see the student loan payments pause gone within 60 days of the deal being signed.
Following the student loan payments resumption, one of SOFI’s main revenue sources from student debt refinancing is back on the table. In 2021, student loans accounted for almost 60% of loans held for sale for SOFI, but as of Q1 2023, student loans accounted for just 32%, while personal loans accounted for nearly 67% of loans held for sale and have seen a 46% increase in originations. Student loan growth stagnation can all be attributed to the pause in student loan payments in 2020.
With the resumption of student loan payments, SOFI can expect to run at full capacity again as the student loan refinance market normalizes. This also suggests that SOFI can expect to reach profitability in Q3 2023 sooner than the forecasted Q4 2023 as Q3 would witness elevated demand for student loan originations.
If the company becomes profitable in Q3, SOFI stock may see a huge jump in its stock price in a similar fashion to Palantir Technologies Inc. (NYSE: PLTR) when it achieved profitability for the first time in Q4 2022. Since then, PLTR stock has climbed by 96% and the same can happen to SOFI stock. If SOFI stock went on a similar run, it could break the $10 mark, which it has not reached for more than a year.
Technical Analysis
SOFI stock’s trend is neutral with the stock trading in a sideways channel between $5.1 and $5.51. Looking at the indicators, the stock is trading above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, the RSI is overbought at 75 and the MACD is bullish.
As for the fundamentals, SOFI stock just witnessed a catalyst in the new debt ceiling deal that would see student loan payments resume within 60 days of being signed into law. As SOFI could now reach profitability in Q3, the current PPS could prove to be a good entry in SOFI stock ahead of its Q3 earnings.
SOFI Forecast
SOFI seems to be in a good spot as it has increased its personal loan originations as its student loan business was almost put on hold, and now with the student loan payments back on the table, SOFI can achieve profitability earlier than expected. In the event that SOFI achieves profitability in Q3, SOFI stock can make a similar run to PLTR and see it break the $10 mark.
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