CNBC’s Jim Cramer recently recommended SoFi Technologies (NASDAQ:SOFI) stock. He believes the “nouveau bank” has got the stuff of long-term success.

Call it what you will. CEO Anthony Neto is building a financial services powerhouse.

Today, it has its name on one of the finest NFL stadiums in the country. Who knows what it will adorn 10 years from now.

I think buying SOFI stock today at a little more than $20 will pay big dividends 5-10 years from now. Here’s why.

SOFI Stock Continues to Test $25

At the end of September, I said that SOFI stock could be setting up for a third run to $25 in the past year. In the three weeks since it’s gained more than 10% and trades above $20 as I write this. 

“SoFi’s revenues were 74.2% higher at $237.2 million in the second quarter, $18.6 million higher than the consensus estimate, good for a 9% revenue beat. As long as it increases sales by 60-70% in the third quarter, it ought to move higher even if it doesn’t beat the estimate,” I wrote on Sep. 27.

“Of course, that doesn’t happen until after October has come and gone. However, was an analyst to either up their earnings estimate or raise their target price or stock rating during the month, that would most certainly push SOFI higher before Halloween.”

Sure enough, SoFi shareholders got their wish.

On Oct. 11, Morgan Stanley analyst Betsy Graseck initiated coverage of the nouveau bank. She gave it an “Overweight” rating and a target price of $25.  

“Competition is rising among challenger FinTechs for Gen Y & Z, but SOFI has a leg up given its roots in the hardest part of consumer finance, lending, along with a robust digital offering,” CNBC reported about the analyst’s note to clients. 

With the addition of Graseck, there are now seven analysts covering SOFI. The analysts have an average Overweight rating with a high-end target price of $30, a low-end target of $16.50, and a median of $25. No analysts have an Underweight or Sell rating.

$25 or bust.

The Former Sponsor

As you might be aware, SoFi went public by merging with Social Capital Hedosophia Corp. V, on June 1, a special purpose acquisition company (SPAC) sponsored by Social Capital CEO Chamath Palihapitiya.

The venture capitalist has experienced the highs and lows of the SPAC boom over the last year. Recently, he discussed why he is welcoming the SPAC market correction.

 “In the beginning of every market you have a few people that pioneer something and then you have a lot of fast following, and I think it’s always important to take a step back when you have all that fast following to sort it out,” Palihapitiya said while speaking at the recent CNBC Delivering Alpha conference.

“I think we’re in the midst of sorting that out and separating the wheat from the chaff.”

The venture capitalist rightly believes that SPAC sponsors need more skin in the game. So, for example, if a SPAC is looking to raise $1 billion, the sponsor should come up with 10% of that. 

He’s right on the money, but, unfortunately, he’s speaking out of both sides of his mouth.

Looking back at the IPO prospectus, Palihapitiya and the rest of the sponsor group put $25,000 into the SPAC plus $16 million in warrants, and they lent it up to $400,000 in the form of an unsecured promissory note. That’s approximately 2.3% of the $700 million it raised in the IPO. 

However, even though he was a little shy of the mark, I like the sentiment. 

As for the sponsor’s investment of $16,025,000, as I write this, assuming the exercise of all warrants, the investment is worth $543.1 million [8 million shares * $19.38 plus 20.03 million shares * $19.38].

For every dollar SOFI stock increases, Palihapitiya and partners make approximately $28 million. 

So, if it goes to $25 as the analyst suggests it will, that’s an additional $100 million for the Canadian venture capitalist. 

If you can’t beat them. Join them. 

Nouveau bank or not, it’s a long-term buy.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.