SoFi Technologies stock (SOFI:NSD) is a play on the Federal Reserve’s interest rates, and if inflation comes down, the Fed might start to reverse its current accommodative stance. If that happens, SOFI stock could be propelled higher, as investors focus more on the company’s growth prospects than the current economic environment.
Also, SoFi Technologies is growing at a rapid rate. The company reported total revenue of $1.06 billion in the first quarter of 2022, a jump of 105% compared to the same period in 2021. Total loan originations for the quarter came in at $4.4 billion, up from $2.5 billion in the same period a year earlier.
SoFi Technologies is actively expanding its business. In February 2022, the company announced its acquisition of Galileo Financial Technologies, an online banking platform. This move should help SoFi Technologies to expand beyond its core offerings and into the banking sector, which could lead to further growth.
For these reasons, I believe that SoFi Technologies is a stock worth watching in 2023 and beyond. If inflation comes down and the Fed reverses its accommodative stance, the company could be in for a nice move higher. Also, SoFi’s rapid growth, potential expansion into banking, and acquisition of Galileo could all be catalysts for the stock in the long run.
CEO SOFI Technologies Continue to Increase Personal Investment in the Company
It’s encouraging to see that Anthony Noto, CEO of SoFi Technologies, is continuing to personally invest in the company. Noto has made several insider purchases of SOFI technologies stock over recent months, the most notable being a $5,005,414 purchase of 1.13 million shares between December 9 and 13, 2022.
This indicates that Noto believes in the long-term prospects of the company, and provides a glimmer of hope for investors who have been discouraged by recent market conditions.
While it’s impossible to know for certain, Noto’s stake in the company is growing and could mean 2023 will be a lucrative year. Ultimately, though, it’s up to individual investors to decide how much consideration to give to insider purchases like these.
Potential Impact of a Federal Reserve Pause or Pivot
SoFi Technologies experienced a difficult year in 2022, with recession fears and the Federal Reserve‘s interest rate hikes impacting the company‘s ability to generate revenue from refinancing student loans.
Although the situation has been challenging, SoFi has managed to meet or exceed consensus estimates since then. The moratorium on required federal student loan repayments is expected to provide temporary relief, and the Federal Reserve‘s rate hikes are likely to reach their terminal rate soon.
This suggests that there will be a relief rally for financial businesses such as SoFi in the near future.
Should You Buy SOFI Technologies Stock?
Analysts on Wall Street are giving SOFI stock a Buy rating, with seven Buys and four Holds. The average price target for SoFi Technologies stock is $7.46, representing a 40.2% upside potential.
If you‘re considering investing in SOFI stock, it could be a smart idea to take a more conservative approach and only invest an amount that is appropriate for your account size.
However, before investing, you should assess the potential of the situation in 2022 to improve, as the Federal Reserve‘s actions could have an effect on SOFI stock‘s performance. If the Fed pauses or reverses its current stance, it could bode well for SOFI‘s future.