SoFi stock price surged and crossed the important resistance level at $18.43 as the company prepares its re-entry into the booming crypto industry. It jumped to a high of $18.57 on Thursday, its highest level since November 2021, and 345% from its lowest level this year.
SoFi rejoins the crypto bandwagon
Wall Street companies with an exposure to the crypto market are booming, with their stocks in a strong rally. Robinhood stock has surged to a record high after launching tokenized stocks. Its market cap has jumped to nearly $90 billion.
SoFi stock has also jumped after the company announced its planned re-entry into the crypto industry. In a statement, the company said that it will launch a solution to help people send and invest in cryptocurrencies. It also hinted at a potential acquisition. Anthony Noto, its CEO said:
“Crypto and blockchain innovations can and will be threaded through each of our businesses and capabilities, including buying, paying, saving, investing, borrowing, and protecting.”
Investing in the cryptocurrency market will enable SoFi to participate in one of the fastest-growing industries today. It will also help it to complement its services, which aim to create a one-stop platform for financial services.
SoFi already offers numerous services, including loans, banking, mortgage loans, student refinancing, investing, credit cards, and insurance. As such, crypto services will complement these solutions.
The risk, however, is that SoFi is late in this industry as companies like Coinbase, Kraken, and Robinhood have already gained substantial market share.
Read more: How Trump’s tax bill could give SoFi a big student loan windfall
Growth is accelerating
The most recent results showed that SoFi’s business continued growing in the last quarter, helped by high interest rates and fee-based revenue. Its net revenue jumped by 33% to $771 million, as the member and product growth accelerated by over 30%. It ended the quarter with over 10.9 million members.
The company’s management expects its business to continue its growth trajectory as the number of users grows. Subsequently, most analysts tracking the company boosted their estimates.
Analysts expect the company’s revenue grew by 34% in the second quarter to over $801 million. They also see the annual revenue jumping by 25.7% this year to over $3.28 billion. It is expected to reach the key milestone of $4 billion next year.
This growth momentum may help to justify the company’s valuation. Data shows that it has a forward price-to-earnings (PE) ratio of 66, higher than the financials sector median of 12.
SoFi stock price technical analysis
The weekly chart shows that the SoFi share price has been in a strong uptrend in the past few months. This surge started after it bottomed at $8.67 on April 7 of this year.
The stock has now crossed the important resistance level at $18.43, the highest swing on January 21. By moving above that level, the stock has invalidated the forming double-top pattern, a popular bearish reversal sign.
SoFi share price is also consolidating at the 61.8% and may eventually flip it. It has remained above the 50-week and 100-week moving averages. Therefore, the stock will likely continue rising as bulls target the all-time high of $28, up by over 52% above the current level.
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