Where Will SoFi Stock Be in 1 Year?
SoFi Technologies (NASDAQ: SOFI) has followed a classic growth stock path since its initial public offering in June 2021 that includes soaring growth rates on top-line revenue and customer acquisitions as well as bottom-line losses related to its growth efforts. This kind of stock gets plenty of investor attention when there is a strong bull market underway (as there was at the time of the IPO) but it tends to get shunned in a volatile economic climate where investors become more wary and focus instead on safer stocks.
This pattern was evident as SoFi stock took a big hit in 2022. But with market sentiment improving in 2023, investors took some tentative steps back to showing an interest again in growth stocks. Many growth stocks were fairly sold off last year because their growth rates (and their loss rates) didn't justify their highly elevated valuations -- SoFi included. But investors are learning this year that SoFi's valuation was taken down a few too many notches and are reacting quickly to resolve that. As a result, SoFi stock is now up 104% so far in 2023.
Can Sofi's business support this massive gain? Is its valuation still misleading? Let's see where SoFi's business is going and where it could be a year from now to see if an answer reveals itself.
Source Fool.com
