Stock Pick of the Week (6/1)
Overview
SoFi Technologies Inc is an American banking company founded in San Francisco in 2011 by two Stanford graduates. It is a digital financial services company and a branchless bank comprising three segments: lending, financial services, and technology platforms. It offers loans such as student and personal loans, investing, and cash management through its financial services, as well as business-to-business cloud-based banking/payment platforms.
Recent News
On May 27th, SoFi released the first stablecoin issued by a US national bank (dubbed “SoFiUSD”) to its 15 million members on the SoFi app, sending shares up roughly 17% and the coin crossing a $100M market cap within days of its launch. The coin itself is backed 1:1 by US dollars held at the Fed, making it incredibly stable and extremely secure. The GENIUS Act, signed in July of 2025, enabled the launch of the coin by giving banks like SoFi a clear compliance pathway for creating their own stablecoins. On the loan front of the business, as Trump’s administration continues to overhaul federal student loan policies, SoFi is positioned well, as borrowers are forced to turn to private refinancing. SoFi’s Q1 of 2026 saw a 2.2x (119%) YoY growth in student loan originations, at $2.6 billion dollars for the quarter, and will continue to climb as Trump's changes will take effect on July 1st.
Financial Indicators
SoFi saw a record-setting Q1 of 2026 across the board. The company posted net revenue of $1.09B, a 43% YoY increase, and net income of $167M. Over the past three years, EPS has grown by roughly 99% annually, while the stock itself has appreciated by only 49% per year. This divergence suggests that the market has been slow to price in the company's consistently growing earnings. However, it is important to note that bear points to consumer credit risk, as credit costs could spike during a period of elevated charge-offs.
Why-to-Buy
It's important to note that the CEO of SoFi, Anthony Noto, recently made open-market purchases of the stock in March and May. Noto bought roughly 116,000 shares, increasing his overall personal share count to 11.9 million shares (roughly $182M). According to SEC Form 4 filings, over the past 5 years, Noto has made 39 buys and zero sells. The stock is currently down 30% from its highs, and analysts speculate it has found a floor and is ready to bounce back. With its recent implementation of the first US bank-backed stablecoin, its positioning within the student loan market, recent administration moves, a confident CEO, and financial indicators suggesting the stock is undervalued, SOFI is CFR’s pick of the week!