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© Reuters. Forget Sofi, buy 3 Stocks of Credit Services instead
While SoFi Technologies (SOFI) made its huge stock market debut on June 1, it seems that its price exceeds the company’s inherent value and could fall in the short term. So we think it’s better to opt for established credit service companies American Express (AXP), Capital One (COF), Discover (DFS) and Synchrony (SYF). These names are well positioned to take advantage of the growing pace of financial transactions in the midst of a fast-paced economic recovery. Continue reading. SoFi Technologies, Inc. (SOFI) Fintech made its stock market debut on June 1, 2021, with Social Capital Hedosophia Corp V, a pure check company. He made an impressive debut, collecting more than 12% of his stocks on the day of trading. However, the stock lost 20.1% in the last month to close yesterday’s trading session at $ 16.94. Analysts expect its EPS to remain negative in 2021 and 2022. In addition, the company’s 12 months net income and ROTA are negative compared to the industry averages of 28.18% and 1.15%, respectively. Due to weak financial and growth forecasts, SOFI seems to be highly overvalued at the current price level. Its 13.71x forward P / S is 3.18x higher than the industry average of 331.1%. So we think it’s wise to avoid stock now.
However, continued economic recovery and rapid technological innovation are driving the growth of credit services. According to research and markets, the global credit card market is expected to grow at a CAGR of 3%, reaching $ 103.06 billion in 2021. Investors ’interest in the credit services space is partly evidenced by the 17.7% gains in the Financial Select Sector SPDR Fund (XLF) over the past six months.
So instead of betting on SOFI, we think it might be wise to bet on the shares of quality credit services companies American Express Company (NYSE :), Capital One Financial Corporation (NYSE 🙂 and Discover Financial Services (NYSE :). These companies are well positioned to take advantage of the industry’s tails.
Fusion Media or anyone related to Fusion Media will not be liable for any loss or damage based on information including data, quotes, tables and buy / sell signals on this website. Please be aware that the risks and costs associated with trading on the financial markets are one of the most risky investments possible.
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