SoFi (SOFI 7.12%) has been one of the best-performing stocks in the financial sector recently. Over the past year, shares of the banking disruptor have roughly tripled, and a quick glance at SoFi's latest results show us why.
For one thing, not only has SoFi's membership base more than tripled since the end of 2021, but the company added 846,000 in the latest quarter -- its highest ever.
Revenue growth came in at 44% year over year, SoFi's highest growth rate since 2022. Not only that, but profitability is quickly heading in the right direction. SoFi's adjusted EBITDA margin has steadily grown from 9% three years ago to 29% today, and the company has produced positive net income since late 2023.
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1 Reason SoFi is still one of the best financial stocks to buy
In full disclosure, SoFi is my largest financial sector investment, and there are plenty of good reasons why it's still an excellent long-term stock to buy. For example, the fast-growing loan platform that originates loans on behalf of third-party banks is creating a growing stream of high-margin fee income. The return of cryptocurrency trading to the platform later this year could also be a big catalyst.
However, one aspect that is often overlooked is SoFi's other loan verticals -- student loans and home loans.
The private student loan business came screeching to a halt during the pandemic, thanks to federal loan repayment pauses and the promise of more loan forgiveness. Now that student loan interest and payments have resumed, SoFi's student loan refinancing business could soar. In fact, SoFi's student loan volume in the second quarter was 152% higher than it was two years ago.
Home loans are an even more interesting component. SoFi grew its home loan business by 92% year over year in the second quarter despite a persistent high-rate environment. As rates fall, there will be a massive opportunity in both purchase mortgages and refinancing, as home equity in the United States is at its highest level ever.
