If I’d Bought $1,000 Worth of SoFi Stock at the Start of 2023, Here’s How Much I Would Have Today

SoFi Technologies (NASDAQ: SOFI) has found a lot of success by disrupting the banking industry. Its all-digital offerings resonate with a younger, more affluent demographic.

This fintech stock is finally catching on with investors as well. If I’d bought $1,000 worth of SoFi shares at the start of 2023, I’d be sitting on a gain of 76% right now (as of Feb. 21). A similar investment in the tech-heavy Nasdaq Composite Index would have climbed by 49%.

Let’s take a closer look at this innovative financial enterprise.

What macroeconomic headwinds?

Once the Federal Reserve started hiking interest rates a couple of years ago, most businesses started to register slower growth as the economy wasn’t as robust anymore. SoFi wasn’t immune to the unfavorable backdrop, and its growth did slow.

But the digital banking business is still registering impressive gains. In 2023, revenue soared 35% to $2.1 billion, with the company expanding its customer base by 44%. There are now 7.5 million people who use a SoFi product or service, up from 1.9 million just three years ago. That ridiculous growth clearly demonstrates that the business is taking market share from industry incumbents.

What really stood out in the company’s most recent report was the fact that SoFi’s deposit base went from $7.3 billion to $18.6 billion during the course of the last 12 months, a 155% jump. This time period included the regional banking crisis, which caused a lot of worry about the safety of banking institutions. Depositors want peace of mind.

SoFi started to offer expanded FDIC insurance with coverage of up to $2 million. And perhaps even more impressive, SoFi’s savings account offers a yield of 4.6%. This undoubtedly helps the company stand out when attracting deposits that can be used to fuel loan growth.

Is SoFi stock a buy?

It’s not a surprise that investors always seem to be enamored with companies that are posting fast growth. However, shareholders should also want to see financial soundness, namely positive earnings. Just like management forecast, SoFi was able to generate net income of $48 million in…

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