SOFI Soars on Bullish Case from Analysts: 'Like Buying Nvidia or AMD at Their Bottom'

A group of analysts on the 'The Deep End' podcast has presented a bullish case for SoFi Technologies Inc. (NASDAQ:SOFI), drawing comparisons to Nvidia Corp. (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD). According to Brad Freeman, buying SOFI at current levels is like purchasing these tech giants during their cyclical bottoms.

SoFi is currently valued like a tech company but trades like a lender, making it vulnerable to fluctuations in interest rates, credit concerns, and lending sentiment. The company's management has been projecting 30% revenue growth and 40% earnings per share growth over the next three years, which Freeman sees as overly pessimistic.

Analyst Tannor Manson noted that SoFi has expanded its member base to 16 million and boasts $45 billion in deposits, with revenue growing at approximately 30%. The company's credit book is resilient, with a 90-day delinquency rate of 0.40% and an annualized charge-off ratio of 3.7%. Additionally, SoFi operates with a structural cost advantage over legacy financial institutions due to its avoidance of branch real estate expenses and use of low-cost deposit funding.

Freeman also emphasized the importance of SoFi's balance sheet structure and capital strategy, citing historical capital raises that allowed the company to eliminate high-interest debt and replace it with low-cost deposit funding. Analyst Shay Boloor, who holds a long position in SOFI stock and has been down 20% on his investment, remains optimistic about the company's prospects.