What happened
Shares of SoFi Technologies (SOFI -0.21%) jumped 26% last week, according to data from S&P Global Market Intelligence. Investors are excited about the online personal finance company's impressive customer growth and progress toward sustained profitability.
So what
With rates as high as 3.75%, Sofi's high-yield savings accounts are proving widely popular among people seeking to maximize their interest income. That's helping the digital bank attract new clients at a torrid pace, including nearly 480,000 new members in the fourth quarter alone.
All told, SoFi's member base grew by 51% to over 5.2 million in 2022. The bank, in turn, attracted more than $7.3 billion in deposits. This remarkable customer and deposit growth drove a 106% surge in the company's full-year net interest income to $531 million.
Moreover, SoFi narrowed its overall net losses by 34% to $320 million last year. CEO Anthony Noto said the company was on track to achieve profitability in the fourth quarter of 2023.
Now what
Jefferies Financial Group analyst John Hecht sees SoFi's stock price rising an additional 7% to $8 per share. Hecht notes that SoFi's deposits increased 46% sequentially in the fourth quarter, driven by its attractive rate offerings.
MoffettNathanson analyst Eugene Simuni is even more bullish on SoFi's shares. He highlighted the company's roughly sevenfold rise in deposits since it obtained its banking charter early last year. Simuni believes SoFi is poised to become a leader in the digital banking industry, and he sees its share price soaring 34% to $10.
