What will the future look like for California-headquartered neo-banking firm SoFi Technologies (NASDAQ:SOFI)? There’s certainly no guarantee that the company will grow or that SOFI stock will gain value over the next seven years. Yet, there are reasons to believe that SoFi Technologies represents the future of modern banking and will stage a major comeback by 2030.
After a brutal 2022 for fintech businesses and especially SoFi Technologies, it’s difficult to find optimistic voices on Wall Street today. For instance, analysts with JPMorgan only gave SoFi Technologies a “neutral” rating and a $6 price target.
That implies some upside potential for SoFi shares in the short term. Still, analysts and investors generally don’t seem to have a positive long-term vision for the company. They may be missing out on a huge opportunity, however. Indeed, they may someday wish they’d bought shares of SoFi Technologies while investor sentiment was at a low point.
SOFI Stock Looks Oversold, Based on the Company’s Membership Growth
Last year, financial traders rotated out of tech-centered, high-growth stocks of 2020 and 2021. They punished SOFI stock harshly, bringing what was once a $25 stock to the $5 area.
This selloff looks overdone, as SoFi Technologies isn’t a shrinking company. During 2022’s third quarter, SoFi added 635,000 new products, up 69% year-over-year (YOY). Quarter after quarter since late 2019, the company has consistently augmented its new product count.
Of course, new products wouldn’t mean much if people weren’t using them. Yet, SoFi Technologies has consistently increased its membership count. Q3 of 2022 was a truly outstanding time for SoFi, as the company added 424,000 new members, representing a 61% YOY increase.
SOFI Stock Could Rocket Higher if Lending Conditions Improve
In light of these stats, one can see why SoFi Technologies CEO Anthony Noto would buy roughly $5 million worth of SOFI stock. He’s probably thinking long term and observing his company’s amazing growth trajectory.
Granted, there are near-term headwinds to overcome. As CFO Chris Lapointe pointed out, SoFi Technologies grew its personal loans business 71% YOY to $2.8 billion in Q3 2022. However, Lapointe observed that “both student loan and home loan originations were down by more than 50%” YOY during that quarter.
Lapointe cited “the moratorium on federal student loan payments” along with “rising rates and fulfilment issues,” which “continue to impact our home loans business.” It’s highly probable, though, that the Federal Reserve will eventually cut interest rates. Plus, the student loan repayment pause isn’t meant to last forever.
So, Here’s My SOFI Stock Price Prediction for 2030
SoFi Technologies is a fast-growing business that’s facing challenges, which will probably be temporary. Meanwhile, the market appears to be overemphasizing those challenges.
Given the rapid growth in SoFi Technologies’ membership and new products, I’m targeting $50 for SOFI stock by 2030. That’s a seven-year runway, and the shares already reached $25 at one point. So, $50 is entirely possible — but please, maintain a small position size and be ready for volatility along the way.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.