It’s not possible to go back in time and invest in Nvidia or Amazon when they were still relatively small companies. However, it is possible to identify corporations that appear poised to establish themselves as leaders in their respective industries. Doing so and investing in those companies can help investors earn outstanding returns over the long term. Let’s consider two stocks that may fit the bill: SoFi Technologies (NASDAQ: SOFI) and Summit Therapeutics (NASDAQ: SMMT). Here’s why these companies might be worth investing in today.
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SoFi Technologies is a financial services company that is gaining prominence. Part of its appeal comes from the fact that it is an entirely online bank, without a single retail location. That’s a familiar business model, especially for younger consumers who make up much of its clientele. Although it was initially created to help college graduates refinance their student loans, SoFi has since evolved. It offers a range of traditional banking services, which have helped attract many more clients. As of the end of the third quarter, SoFi had 12.6 million customers, representing a 35% year-over-year increase.
Looking forward, the fintech specialist has catalysts that should help it perform well in the long term. One of them is that it continues to add new products to its ecosystem. The company is reentering the crypto trading market after staying out of this lucrative (albeit volatile) business. Second, SoFi makes meaningful revenue by cross-selling additional services to existing members. In that department, there is still plenty of room to grow, as it currently has just 1.5 products per member, despite having many more available.
Customer growth should be another key long-term tailwind. Younger individuals are entering the workforce and starting to accumulate capital and require banking services. SoFi is well positioned to capture a meaningful share of this opportunity thanks to the company’s digital-first approach. Of course, there are some risks to be aware of. SoFi has…
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