What happened

SoFi Technologies (SOFI -2.46%) was good to investors in January as its stock price soared 50.3% higher, according to data provided by S&P Global Market Intelligence. As of Feb. 2, after a few more good days since the end of the month, it is up a whopping 75% year to date. This eases some of the pain from 2022, when it fell almost 71%. 

SoFi outperformed the major market indexes in January as the S&P 500 was up 6.2%, the Dow Jones Industrial Average gained 2.8%, and the Nasdaq Composite was up 10.7%.

So what

SoFi Technologies, an online lender and digital bank, had put up solid growth numbers throughout last year, but high expenses and a bear market for tech stocks kept the stock price moving lower.

But continued growth and record revenue for the fourth quarter and full year sent the stock price soaring last month, as the company drew closer to becoming profitable.

Among the highlights from the Jan. 30 fourth-quarter earnings report, SoFi posted a record $457 million in revenue, up 60% from the fourth quarter of 2021. Further, the fintech added 480,000 new members, or customers, up 51% year over year. It had 5.2 million members at year-end.

In terms of products, which refers to the number of products and services that members use, SoFi saw 695,000 new product adds in the quarter, up 53% year over year. At year-end, SoFi had 7.9 million products used.

These huge growth numbers, offset by still rising expenses and higher provision for credit losses, brought SoFi closer to profitability. In the fourth quarter, it had a net loss of $40 million, or a loss of $0.05 per share, which is a 64% improvement from a year ago this quarter.

"Our strong momentum in member and product adds, and the momentum in products added from cross-buy, reflects the benefits of our broad product suite and Financial Services Productivity Loop (FSPL) strategy," Anthony Noto, CEO of SoFi, said in the earnings report. The FSPL is basically the company's strategy of cross-selling its products and using technology to create efficiencies to generate better unit economics.

Now what

Last year's sell-off brought the valuation down, and it now has a price-to-sales ratio of 3.9, down from 14.6 at the end of 2021.

It might be a good idea to jump on this stock at this lower valuation, because it should continue to grow as it moves toward profitability. Management anticipates $430 million to $440 million of adjusted net revenue this quarter, which would be a 34% to 37% year-over-year increase, and $40 million to $45 million of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).

For the full year, adjusted net revenue is expected to grow 25% to 30% to between $1.925 billion and $2 billion, while adjusted EBITDA is targeted to be between $260 million and $280 million -- up from $143 million at the end of 2022. Further, management anticipates reaching quarterly profitability in Q4 2023.