Only Buy SoFi Technologies if You Believe the Economy Can Avoid a Recession
Investors in SoFi Technologies (NASDAQ: SOFI) were excited by what they saw in its fourth-quarter 2022 earnings report on Jan. 30, driving the stock price up 12% on the day. The company beat analyst forecasts for revenue and earnings while displaying solid execution in a shaky economy. However, the company has a history of beating analyst estimates on the top and bottom lines since the fourth quarter of 2021, and that did not prevent the company from sinking to a 52-week low of $4.24 on Dec. 28.
This article will examine why investors shunned the stock throughout 2022 despite solid revenue growth and strong overall operating results. It will also discuss why the sentiment toward the stock shifted to positive in 2023.
In 2021, a Morgan Stanley analyst called SoFi the "fastest growth story in consumer finance." However, investors are less concerned about the rapid growth in a rising interest rate environment and care more about how much risk the company takes to achieve that growth. So, what does this company do to achieve its growth, and is it risky?
Source Fool.com
