SoFi Share Price Forecast March 2022 – Time to Buy SOFI?
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Shares of American online personal finance company SoFi (NASDAQ: SOFI) are in the red today, after closing at $ 9.77 as of March 30th (19:59 EDT). SoFi shares are cheap at the moment, as they have declined due to the NASDAQ 100 falling by 10% year to date.
SoFi- Technical Analysis
SoFi’s financial statement indicates a market cap of $8.095 billion with total assets worth $9.176 billion. Revenue for 2021 was at $1.09 billion with a profit margin of -44.49% compared to $721.02 million in 2019. As of 2021, it has liabilities worth $4.48 billion with a debt to asset ratio of 48.41%.
Moving averages such as Exponential Moving Average (10)(9.52), Simple Moving Average (10)(9.51), Exponential Moving Average (20)(9.71) and Simple Moving Average (20)( 9.38) are indicating a buy action. Oscillators such as Relative Strength Index (14)(48.24), Stochastic %K (14, 3, 3)(77.76), Commodity Channel Index (20)(72.13), Average Directional Index (14)(14.94) and Awesome Oscillator(−0.88) are neutral.
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Recent Developments
SoFi is a company that provides digital lending and personal finance launched back in 2011 and is a public company since June 2021. It provides services through its app, offering loans, mortgages, banking services, investments, personal finance tools, and direct deposits. SoFi shares increased to about $23 per share on November 4th, before beginning a rapid decline over the next three months. However, the company stands out from the crowd due to several reasons.
SoFi has experienced explosive growth due to its members and customers who use its products. Membership counts doubled in the past year to reach $3 million at the end of the third quarter. The company’s total products have jumped 108% to about 4.3 million in the past year. This also contributed to a 35% increase in the third-quarter revenue to reach $272 million from a year earlier. The second reason is its banking-as-a-service business which is a key differentiator.
This segment has been growing exponentially. SoFi entered the business when it acquired Galileo in 2020. Since then it has been generated strong growth and its third-quarter revenue increased by 29% year over year to reach $55 million. Apart from being a revenue generator, it opens up significant opportunities for the company to sell its lending and other products.
SoFi also acquired Golden Pacific Bancorp on February 2nd. It is a big move for a fintech to get a bank charter, which can open many doors. This will allow SoFi to set its own interest rates instead of going through bank partners. It can conceivably offer higher interest rates on customer balances, which can give it an edge.
Should You Buy SOFI Shares?
The acquisition of Golden Pacific Bancorp can allow SoFi to build a national digital bank while maintaining the physical bank branches in California. It has announced an annual percentage yield of as much as 1% on members’ accounts. The company can thus differentiate itself from its fintech peers with higher interest income as the market enters a period of rising interest rates. Additionally, it has its banking-as-a-service business to diversify.
Sofi is still not profitable and may take time to make its mark as a digital bank against a whole new set of competitors in the banking world. However, Sofi still has brand recognition among younger adults as it started out as a student loan provider. Thus with so much of opportunity, now is the perfect time to buy SoFi shares.
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