Technology

A WallStreetBets Stock Poised To Explode

SoFi Technologies SOFI is a nascent consumer fintech company with massive growth potential. After some wild year-to-date price action earlier in the year, the stock has finally come down to a technical & fundamental level that screams opportunity. 

Institutional interest is beginning to flood into SOFI on growing, price-confirming volumes.

The Business

The enterprise provides 3,667 digital-inclined financially-focused products to nearly 2.6 million customers. SoFi has been anything but idle amid the pandemic, with hundreds of new products being added to the platform every quarter, which has driven its memberships up prolifically.

The company has accelerated its membership growth for the past 8 consecutive quarters, exhibiting 113% customer expansion in Q2, on the back of 110% in the prior quarter.

This nascent fintech innovator is driving excellent year-over-year (YoY) revenue appreciation, with this past quarter's swelling 74%. It has also achieved 4 consecutive quarters of positive EBITDA as the business rushed towards profitability. Analysts are currently estimating full-year profits as soon as next year.  

SOFI went public via one of Chamath Palihapitiya's illustrious Social Capital SPAC mergers. Chamath has taken such names as Virgin Galactic (SPCE), Clover Health (CLOV), and Opendoor (OPEN) onto the public exchanges through the convoluted SPAC merger process. Each of these deals gained massive interest on Reddit's market-moving r/wallstreetbets message board, where millions of young traders are coming together to promote their favorite equities 'to the moon.'

Chamath has become an investing icon among young investors & traders, with his outspoken opinion about the financial market. Chamath is playing into r/wallstreetbets' "Occupy Wallstreet" narrative, with his dogmatic beliefs regarding asymmetric access to information and capital that Wall Street holds over individual investors. His conveniently aligned viewpoints with this new investing cohort have allowed Chamath to profit heavily from r/wallstreetbets engagement in his blank-check companies.

SoFi has fallen from the heights of its euphoric options-driven rally and has come down to a comparatively discounted valuation as rational institutional investors take over the trade.

The Opportunity

SOFI bounced hard off a critical technical support level around $15.50 in this Thursday session (9/30), and it now looks poised to slingshot higher on the session's price confirming volumes. We had dual support at $15.50 (circled in red below) with a 50% Fibonacci-retracement (using August highs and lows) and SOFI's 50-day moving average coming together to create an excellent springboard for this stock.

TradingView

Image Source: TradingView

On top of the accommodative technical support, SOFI finally dipped below 10x forward P/S, which positions it nicely for a safer value-oriented entry point. Analysts are starting to get bullish on this stock, with price targets ranging from $23 to $30 a share, representing a 45% to 89% upside from here. 4 out of 4 analysts are calling SOFI a buy today.

Final Thought

SoFi is successfully executing on its growth narrative in a way that I have never seen before, providing market participants with excellent topline visibility and ample reason to get in while the stock is still cheap.

Now is the perfect time to start a position in this revolutionary fintech company poised to thrive in the commencing 4th Industrial Revolution.


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