Should You Buy SoFi Technologies Stock While It's Below $20?

Growth and Financial Performance - SoFi's adjusted revenue grew at a CAGR of 49% from $621 million in 2020 to $2.07 billion in 2023 [3] - Adjusted EBITDA turned positive in 2021 at $30 million and grew at a CAGR of 279% to $432 million in 2023 [3] - The company expects a full-year GAAP profit for 2024 and forecasts adjusted revenue growth of 22%-23% and adjusted EBITDA growth of 48%-49% in 2024 [3][7] - Analysts project revenue to grow at a CAGR of 19% and adjusted EBITDA at a CAGR of 44% from 2023 to 2026 [7] - GAAP earnings per share are expected to grow at a CAGR of 90% from 2024 to 2026 [7] Market Position and Valuation - SoFi trades at a price-to-book ratio of 2.8, higher than Bank of America (1.3) and Wells Fargo (1.5) [2] - At $16, the company has an enterprise value of $16.2 billion, trading at 5 times next year's sales and 18 times adjusted EBITDA [11] - If the stock reaches $20, it would trade at 7 times next year's sales and 22 times adjusted EBITDA [11] - The stock is currently above the average price target of $11.66 but below the top target of $20 [8] Expansion and Ecosystem - SoFi acquired Galileo in 2020, which now hosts over 160 million accounts and contributed 10% of SoFi's profit in 2023 [5] - The company signed a $2 billion deal with Fortress Investment Group in October 2023 to underwrite loans and generate fee-based revenue without increasing leverage [10] - SoFi obtained a U.S. bank charter in 2022 and launched a digital-only direct bank, leveraging AI algorithms to optimize fintech services [18] Customer and Product Growth - SoFi's members grew from 2.52 million in 2020 to 9.37 million in Q3 2024 [12] - The number of products increased from 1.85 million in 2020 to 13.65 million in Q3 2024 [12] Challenges and Recovery - Rising interest rates and a federal freeze on student loans from March 2020 to September 2023 impacted SoFi's loan business [4] - The U.S. Federal Reserve cut interest rates three times in 2024, with at least two more expected in 2025, easing pressure on the student loan business [6] Long-Term Vision - SoFi aims to become a "one-stop-shop" for financial services, eliminating the need for separate banking and investment apps [18] - Founded in 2011, the company initially focused on student loans and expanded into mortgages, auto loans, personal loans, credit cards, insurance, estate planning, and stock investment tools [19]