If you haven't been considering SoFi Technologies (SOFI 5.08%) for your long-term portfolio, you might want to do so. More than a few outfits that some would label "smart money" have been buying. For example, as of the last quarter, Vanguard owned 8.4% of SoFi, while Jane Street owned 5.5% and BlackRock 4.1%.
They've likely done well, too, because as of Oct. 23, the stock was up a whopping 169% over the past year, and it has averaged annual gains of 76% over the past three years.
NASDAQ: SOFI
Key Data Points
SoFi is a "fintech" business -- an online bank also offering personal finance services. Known earlier for its student loan services, it has greatly expanded its scope, and now offers auto loan refinancing, personal loans, mortgages, credit cards, investments, and, of course, banking. Via its app and website, it's targeting younger consumers in particular.
That's a promising focus, because any customers it grabs may stick with it for decades -- especially since it keeps adding products and services to its financial ecosystem. It might need to keep doing so, though, as a Motley Fool Research report found that around three quarters of banking customers are likely to switch banks if they find something they like better.
SoFi Technologies is performing well, with 12.6 million members as of its third quarter, up 35% over the year-earlier quarter. Revenue for the quarter rose 38% year over year and fee-based revenue jumped 50%. CEO Anthony Noto noted, "We achieved record adjusted net revenue of $950 million and added a record 905,000 new members."
If you're rushing to buy some shares now, slow down. Know that its valuation is very much on the steep side at recent levels. Its recent price-to-sales ratio of 10.8, for example, is far above its five-year average of 4.2, and both of those numbers are steep.
So go ahead and join the "smart money" by buying shares now, but only if you're risk-tolerant. To play it safer, you might buy over time incrementally, or just add the stock to your watch list, hoping for a pullback.
