SoFi stock price has pulled back and moved into a correction after falling by over 13% from its highest level this year. It was trading at $21.55 on Tuesday, which was up by 255% from its 2024 lows. So, is it safe to buy SoFi ahead of it crypto services launch?
SoFi’s business is thriving
SoFi, one of the biggest fintech companies in the US, is firing on all cylinders as it continues to attract more young people into its platform. Its annual revenue has surged from $565 million in 2020 to over $3.02 billion in the trailing twelve months.
The most recent results showed that the revenue jumped by 44% in the second quarter to $858 million. This means that its Q2 revenue metric was higher than what it made in the financial year of 2020, helped by its strong member growth. It ended the last quarter with over 11.7 million members.
SoFi’s adjusted EBITDA rose to $249 million, while the net income was over $97 million. This growth happened as the company accelerated its Financial Services solutions, especially its SoFi Money service.
Most importantly, SoFi expanded the Loan Platform Business, monetizing over $100 billion in unmet loan demand.
Crypto services to provide more catalysts
The next major catalyst that will fuel SoFi’s growth is the upcoming launch of its crypto business. This pivot to crypto will likely supercharge its growth as other companies like Robinhood have done in the past.
SoFi plans to launch a self-serve international money transfer service, enabling SoFi Money users to make international transactions. Users will first deposit cash to their SoFi Money accounts, initiate a transaction that is handled using the blockchain, and thn the funds are converted to the recipient. It will take less than 1 minute to complete.
SoFi also plans to launch a platform to buy and sell cryptocurrencies, making it a rival to companies like Coinbase and Robinhood. The service will complement its existing investing solutions.
SoFi has a real chance of gaining some market share in this industry because of its active clients and the services it offers. Its current suite of products include banking, credit cards, investments, and loans. As such, it acts as a financial supermarket offering products that people need.
Sell-side analysts are highly optimistic that its growth will continue. The average estimate is that its revenue will jump by 25% in the third quarter to $868 million.
They also expect the results to show that the annual revenue will rise by 31% this year and 22% in 2025 to $3.42 billion and $4.18 billion, respectively.
SoFi stock price analysis
The daily chart shows that the SoFi share price has been in a strong uptrend after bottoming at $8.67 in April. It jumped to $25 and then pulled back to the current $21.55.
SoFi stock remains above the crucial resistance level at $18.43, its highest point on June 24. It also remains above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls are in control.
Therefore, the stock will likely resume the uptrend as bulls target the key resistance point at $25, its highest point this year. A move above that level will point to more gains to $30.
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