SoFi Technologies Share Price Forecast December 2021 – Time to Buy SOFI?
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Shares of Fintech lending platform SoFi Technologies(NASDAQ: SOFI) are in the green today after closing at $15.09 on December 23rd (19:59 EST). Sofi Technologies declined 41% from its record high, now trading at an all-time low of just 12 times sales.
SoFi Technologies – Technical Analysis
The financial statement of SoFi Technologies indicates that the market cap is at $12.176 billion with total assets worth $8.083 billion.
Oscillators such as Relative Strength Index (14)(39.62), Stochastic %K (14, 3, 3)(38.71), Commodity Channel Index (20)(−42.11), Average Directional Index (14)(30.98) and Awesome Oscillator(−3.29) are neutral. Moving averages such as Exponential Moving Average (20)(15.97), Simple Moving Average (20)(15.73), Exponential Moving Average (30)(16.67), Simple Moving Average (30)(17.40) and Exponential Moving Average (50)(17.33) are indicating a sell action.
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Recent Developments
SoFi has made tremendous progress over the last few years, such as closing a $ $500 million in a single funding round led by Qatar Investment Authority in May 2019. It has also signed a 20-year deal worth $30 million annually, with the Los Angeles Rams and the Los Angeles Chargers of the National Football League (NFL) for the naming rights to SoFi Stadium.
Initially started as a lending platform, SoFi has since become an all-in-one app for consumers. It now offers investing services, debit and credit cards, and even insurance. The company experienced its biggest sequential increase of membership in absolute terms in the company’s history, now having 2.9 million members. The company’s member count rose 96% from a year earlier in the 3rd quarter. This is, however, slower than 2nd quarter’s growth of 113%.
SoFi customers use more than 3.2 million financial-services products, much more than the 1 million lending products they use. This is evident from its growth in financial services of 179% year over year, while growth in lending is just 15% from a year ago. This is good news for SoFi as financial services offer more reliable revenue streams than lending.
SoFi customers are adopting more than one product as evidenced by the customer count increase of 96% and total product usage increase of 108%. The average SoFi customer uses 1.45 products, which has improved from 1.1 products in 2019. This has caused the company’s net loss to decrease. It posted a net loss of $30 million in the third quarter, down from $43 million in the year-ago period.
Should You Buy SOFI Shares?
Sofi normally provides competitive rates during a regular interest market. But if dent loan interest rates remain at zero for federal loans, it eliminates the incentives for borrowers to move into a private loan. Student loan originations accounted for over $6.5 billion in revenue for SoFi in 2018 and 2019. In 2020, this figure dropped to $4.9 billion when federal student loans started pausing interest payments. It has fallen to $3.8 billion in its trailing 12 months.
Investors should note that this will have minimal impact on the company’s guidance. SoFi has seen strong growth in its home lending and personal lending within its lending segment despite the slowdown in its student lending. Its lending has contributed $117 million in profits, up from $103 million a year ago.
The exposure to the loan market is the only risk that remains for investors as the company still makes the majority of revenue off lending. At current levels, the company has the potential to be a major winner not only in 2022 but in the next five years.
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