Fintech startup SoFi goes public. What are the prospects? J | 🚀 Robin Rocket

Fintech startup SoFi goes public. What are the prospects?

Jefferies analysts reviewed SoFi's fintech and identified several growth drivers.

SoFi Technologies $SOFI is a fintech company providing consumer loans.
Target price from Jefferies - $25, upside potential +41%

Theses in favor of the company's growth:

• Flywheel model. The SoFi business model is built on the flywheel principle. With the flywheel, the company leverages the momentum of satisfied customers for referral and repeat sales. In fact, the company's business revolves in an endless cycle of customer acquisition.

Analysts believe that using the flywheel, the company will attract more customers, enhance the introduction of new products to the market, and increase sales margins.

• Acquisition of Galileo. Analysts point out that the acquisition of Galileo will be a key factor in the company's development. SoFi and Galileo form a unique synergy that goes far beyond traditional vertical integration.

The union of the two companies increases marketing efficiency, which leads to the possibility of cross-selling between the client bases of both companies. Since the acquisition of Galileo, SoFi has a unique position in the market as it can provide not only B2C but also B2B services.

• Jefferies Predictions. Analysts note that the company is at the beginning of its development cycle. Jefferies is forecasting double-digit annual sales growth for various categories of SoFi services through 2025, including home and consumer loans.

Fundamental indicators:

• Market cap = $14.1 billion
• P / S = 17.5x
• P / S sector = 1.5x

Not an investment recommendation.