Stocks to buy

SoFi Technologies (NASDAQ:SOFI) shares have rebounded strongly after a prolonged decline, climbing back to high single-digit levels. All thanks to the recent resolution of the U.S. debt ceiling issue. Especially the part related to student loans, which has alleviated investor concerns, and played a vital role in the SoFi stock turnaround. The question now is whether the upward momentum of SOFI stock will continue or if the recent rally will lose steam. Various factors, both macro and company-specific, could influence the stock’s future direction. It remains to be seen what the best course of action would be for investors.

With that said, let’s delve into the details to make an informed decision regarding the SOFI stock.

The Most Recent News on the SoFi Stock

Year to date, the SOFI stock is up more than 100%. While that happened over the course of this year, that move really took place over the past month (SOFI stock traded relatively flat between the start of the year and mid-May).

Indeed, SOFI stock has seen some impressive surges in recent trading days, on the heels of a big announcement. The company brought forward its new “SoFi at Work” service, coinciding with the approaching end of the student loan moratorium. The launch includes the Student Loan Verification program, leveraging the provisions of the Securing a Strong Retirement Act (SECURE 2.0). This program enables employers to match employees’ student loan payments, contributing to their retirement plans through established benefits programs.

Barrett Scruggs, Vice President of SoFi at Work, expressed the company’s commitment to assisting individuals in improving their financial situations. He highlighted the significance of SECURE 2.0 and its provision that enables companies to enhance the financial well-being of all employees. Scruggs emphasized the ease and effectiveness of SoFi’s Student Loan Verification service, enabling companies to implement this valuable benefit and contribute to a more inclusive future.

SoFi Fundamentals

SoFi’s student-loan volume in the first quarter dropped by over 50% compared to pre-pandemic levels, totaling $525 million. The company had previously filed a lawsuit to terminate the debt moratorium, but the recent debt-ceiling deal now renders it irrelevant.

The key factor investors will undoubtedly be focusing on moving forward is how SoFi’s fundamentals improve, with the lifting of the student loan payment moratorium. Analysts and investors have run the numbers, and clearly think SOFI stock is undervalued on what could be an incredible second half of the year in terms of deal volume.

What Now?

Despite not yet being profitable, SoFi has been steadily growing its user base, revenue, and technology platform. In the first quarter, its revenue saw a substantial 43% year-over-year growth, totaling $472 million. With a price-to-book ratio of 1.2 and a price-to-sales ratio below 4, the stock demonstrates the potential for further development.

The end of the student loan payment pause could have a positive impact on SOFI stock, potentially driving it to new heights. As SoFi moves closer to profitability, patient investors who recognize the potential of this affordable and expanding fintech company may reap long-term rewards.

On the date of publication, Chris MacDonald 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.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.