The Nasdaq stock market has officially entered correction territory, with the Nasdaq Composite (NASDAQINDEX: ^IXIC) down by about 14% from its recent high as I write this. While the recent volatility can certainly be scary, it can also create buying opportunities for patient long-term investors.
One stock that looks especially interesting is banking disruptor SoFi Technologies (NASDAQ: SOFI). Despite entering 2025 with excellent momentum, the stock has lost more than a third of its value in the past six weeks, and this could be a great time for investors to take a closer look.
I won’t sugarcoat it: SoFi’s stock chart looks scary. But if we ignore SoFi’s stock price performance for a bit and simply look at how its business is performing, it paints a much different picture.
In 2024, SoFi grew its revenue by 26% to an all-time high, and produced the highest adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA); adjusted earnings per share (EPS); and net income in its history. Although it is still very much in growth mode, this was the company’s first full year of profitability, and while SoFi certainly trades for a premium to its peers, the bank grew its tangible book value by a staggering 39% in 2024.
SoFi ended 2024 with 10.1 million members, 34% more than it had at the end of the prior year. It reached $25 billion in deposits, an especially impressive milestone considering SoFi didn’t have a banking charter until 2022.
Plus, SoFi is growing in ways that could pay off handsomely in the long run. It is rapidly scaling its loan platform business, which originates loans on behalf of third-party lenders, and also makes referrals, creating a low-risk, capital-light source of fee income. Furthermore, the Galileo technology platform’s growth is accelerating, and it recently signed a processing deal for the Direct Express federal benefits program.
Credit cards are another area to watch. SoFi launched two new credit cards in the fourth quarter, the SoFi Everyday Cash Rewards and SoFi Essential. Both are solid products, and there could be many others to come.
For example, SoFi has a rather affluent membership base, so a premium-style credit card product or a travel credit card could resonate with its members. The high-interest nature of credit cards can create some attractive margins, so I’m excited to see this part of the business evolve.
Looking ahead, SoFi anticipates revenue growth of about 25% in 2025, and diluted EPS growth of about 73%. And keep in mind that this is a company with a strong history of overdelivering on its guidance.
