SoFi (NASDAQ:SOFI) closed its SPAC merger early in June and celebrated roughly 40% gains in the month of May. It’s no surprise that everyone we’ve told about SoFi loves it. Everyone we’ve told about SOFI stock loves that too.
And now that it’s since dropped below the $20-plus level after its post-SPAC rally, SOFI is an enticing buy.
Why We Like Sofi and SOFI Stock
SoFi is a next-generation disrupter in the fintech space that we believe has the potential to turn into the “Amazon of Finance.” As interest in financial technology continues to grow, the best players in the space, like SoFi, will begin to really put the heat to banks like Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC) and others.
There’s massive potential in this space, and particularly with SoFi.
The team making the magic happen was founded by Stanford business students in 2011. This team experienced the bleak student loan financing industry first-hand.
They quickly identified the the main, glaring issues.
First, banking is primarily physical. As a result, a lot of property-related fees that the banks incur get passed onto consumers.
Second, student loans feature far too many middlemen, each with their own fees they want to collect, and are anything but simple.
These Stanford students created SoFi with the intention of leveraging automation and a digital-first experience to create incredibly simple and inexpensive access to student loan financing.
And over the past decade, their solution clearly struck a nerve. Students all over the U.S. have refinanced their loans through SoFi to take advantage of lower rates. Contrary to the traditional system that’s in place, SoFi passes their cost savings onto students rather than fees. What a novel concept.
What SoFi Brings to Fintech
Over the last few years, SoFi has created a series of digital-first fintech solutions to serve a variety of use cases.
First up, we have SoFi Money, which is a cash management account that functions similarly to a checking or savings account with zero fees and a featuring an attached debit card.
SoFi Invest is a mobile investing account that allows consumers to invest in stocks, ETFs and cryptocurrencies using the funds they have in their SoFi Money account.
As far as SoFi Credit Card goes, it’s exactly what it sounds like. It also has the added bonus of its 2% cash-back rewards being usable to pay down SoFi loan debt or for investment purposes.
SoFi Relay is budget software for monitoring your accounts through SoFi and other banks.
And lastly, SoFi Education offers free educational content covering a range of financial topics from crypto investment to credit scores.
If that sounds like a lot, it really is. And it’s all bundled into SoFi’s native mobile app. It’s a one-stop destination for managing and making money.
In our opinion, this is the future of banking, and all our friends’ we’ve showed SoFi to would agree.
And Rosenblatt’s initiating of coverage on SOFI stock with a “Buy” rating and $30 price target is a huge vote of confidence, too.
This is a great long-term hold opportunity, because SoFi’s digital solution is spreading like wildfire, and SOFI stock is bound to catch fire soon.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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