The Market Is Still Getting SoFi Wrong
Summary
Couch Investor provides a comprehensive update on SoFi, emphasizing that the gap between the company's business performance and its stock price is widening. Couch Investor highlights that while the stock has faced a drawdown of nearly 36% year-to-date due to macroeconomic uncertainty and interest rate concerns, the underlying business grew revenue by over 40% in Q1. Couch Investor notes that the company is successfully transitioning into a 'one-stop shop' for financial services, which increases average revenue per member and enhances customer ecosystem stickiness.
Couch Investor details several recent strategic moves, including the launch of small business loans, AI-driven investing tools like 'Composer', and a first-of-its-kind USD stablecoin issued by a US national bank. Couch Investor argues that these innovations, powered by SoFi's proprietary tech stack, allow for faster scaling and higher margins. Couch Investor also discusses the technical setup of the stock, noting it is back above key moving averages and could see a significant move if upcoming earnings exceed expectations.
Mentioned Stocks
Reasoning: Couch Investor believes SoFi is significantly undervalued, citing a DCF-derived price target of $25.70, which represents a 37% upside. Couch Investor highlights robust fundamental growth, including 40% revenue increases and 35% member growth, while noting that the stock price is currently suppressed by macro factors rather than business performance. Couch Investor specifically mentions that buying SoFi under $19 might be the last chance to do so before a potential breakout.