鉴于强劲的增长和盈利能力的改善，SoFi相对于其2028年目标被低估。

Yeah, and so I'll start off today with one of my favorite companies out there, which is SoFi. Now, I know whenever we talk about SoFi Technologies, people automatically think, "Oh, what's so interesting about a bank?" Well, let me just say, you know what? Let's say it is only a bank. It is only a bank that's worth $23 billion, a trailing PE of 37.6 times, which for banks is quite expensive. A forward PE of 24.5 times, which here as well, it is cheaper, but for just a bank, it is maybe too expensive.

Well, the thing with a SoFi is that, unlike traditional banks, this one is growing at 30% this year. I mean, they they project it to grow at a compound annual growth rate through 2028 at around 30%, maybe even more. EPS EPS is actually expected to grow much faster than that also through 2028.

And so, you know what? You can call it a bank. I don't mind. But the reason why certain names do get a higher multiple or a premium is because they are growing much faster. This is a company that is growing faster and also becoming more and more profitable.

Now, more recently, we can add some optionality. We have a stablecoin business. We have crypto coming back to the platform as well. Those are nice extras.

Now, if you look at for example, can use the term here as well average revenue per user or per customer at SoFi, compare that to big banks, it's still very, very early days. They can still monetize each and every user much, much better.

Now, it's not all roses, right? It's not all great at SoFi because there is one segment of the company which is the tech platform Galileo. It's their proprietary technology stack which, okay, helps the core business become a better, move much faster, but this was supposed to be as some called it the AWS of fintech. Well, it never happened. It never happened. Uh growth slowed down, growth actually declined year-over-year, but from the recent results, it seems like growth or the slow in growth has bottomed.

And if we did have a a bottom last quarter, then I just see this as, you know what? Here as well, an extra to the business. An extra push for growth that is now coming from a business segment that yes, has been extremely disappointing uh before and right now,

I'll be honest when I look at SoFi, I'm not even looking at the tech platform anymore. I'm only looking at, well, the lending side which has been doing extremely well and on the financial services side as well which also has been growing very rapidly.

Now, what's interesting is their loan platform business, you would think it falls under the lending segment, but no, it falls under the financial services segment and the loan platform business is a high margin, lower risk type of a business which is also growing super quickly, helps the business grow fast, become more profitable.

We have SoFi Plus which is a the services and I know, another subscription service? Yes, but I do think that the value that you're paying for it as a member, everything that you get, it does make sense, and that's also one of the ways that they continue to monetize each and every user, make sure that the user participates more in the ecosystem that SoFi is trying to build.

It is still very early days. I understand that there are people that only look at it as a bank. They have a bank, which is great, which is why this company is doing extremely well despite high interest rates.

Guidance, for example, they came into this year expecting rate cuts. Guidance hasn't changed. Until last quarter, they actually increased it revenue-wise. Despite their outlook becoming worse and worse. To me, that just portrays strength.

They're now expecting one to two rate hikes for this year. Seems like the market is pricing in one to two rate hikes. Are we going to get two? I don't know. I think we're definitely going to get one. But if we get only one and they're pricing in two, that's pretty good cuz then they'll just beat or at least meet their own guidance.

PE-wise, I think it's trading at around 16 times uh the 2028 target that the company itself has put out. So, all in all, it's a very cheap name.

Of course, if you're not interested in owning a bank or a fintech name, then maybe it's not for you. But if you do like a high-growth company that is becoming better and better, more profitable, and has actually executed extremely well over the last couple of years where technically speaking, they shouldn't really be around anymore because lending was a big part of their business before. Was a big problem with lending. So, it should have been left behind. They did survive. They did come out of that situation as a much stronger company. So, I had to put SoFi again here on on the list.

I'm glad you did cuz I think there's been a lot of kind of this debate of okay, are they a fintech, are they a traditional bank? They're not valued like a traditional bank. How do we think about this business? And I think the argument that you put forward is is really strong, and essentially it's that this is a company that operates much more like a vertically integrated tech ecosystem than a traditional bank.

I mean, you know, traditional banks rely heavily on the difference between the interest they pay on deposits and the interest they earn on loans, which is your net interest margin. And SoFi structures their operations around this kind of multi-pronged framework, where they're able to maximize their customer lifetime value, and then they are able to keep a lot of those other costs more on the lower side.

And the lending segment, which you mentioned, you know, this has been their largest revenue contributor. It focuses on, you know, personal loans, student loan refinancing, mortgages, and they they hold loans for interest, but then they also package bundles of these loans, they sell them to institutional investors at a premium, and so they generate fee revenue that way. They free up as well capital to issue new loans.

There's the the financial services segment, right, which you talked about, which is the checking, savings, credit cards. Um and then there's obviously the technology platform, the Galileo Technisys, where they essentially license their core banking software, payment processing, and API infrastructure to other fintech companies and, you know, digital banks and so forth.

And I point this out because I do think there's sometimes a lot of confusion about what makes their business different, and I think this really [clears throat] highlights where you can kind of separate it from a traditional bank. And you know, they've traditionally targeted higher-income tech-forward consumers. That's tended to give them a bit of a more resilient profile as well than traditional banks in addition to their business model.

For me, the risks that I watch here are, you know, they're not all really specific to the business. I mean, you think about consumer credit card and personal loan payments have been the lateness of those has been quietly kind of ticking upward across the country. So, that could test SoFi's kind of prime demographic. If we see a scenario where some of the bigger institutional buyers maybe pause buying loans at the pace they are, that could also be an element to watch.

Another thing, too, I mean, holding a federal banking charter, they have a lot of, you know, government capital ratio requirements. There's much more intense scrutiny that happens because they hold that charter. So, all of these things, I think, are risks to watch, but I do think it's a really interesting business if you're looking at interest at both the fintech space and the traditional banking space and are wanting to maybe capitalize on a more modern version of that framework.