Not long ago, CNBC personality and Mad Money host Jim Cramer expressed his approval of SoFi Technologies (NASDAQ:SOFI). Is this the kiss of death for SOFI stock? Don’t rely too much on your “inverse Cramer” strategy, as SoFi Technologies could be a fintech-space winner in 2023’s final months.
Cramer’s exact quote was, “I think, if anything, I’m a buyer, not a seller, SoFi.” I’ll admit, that’s not the most glowing endorsement that Cramer has ever given to a stock.
Still, the Mad Money host might have some perfectly valid reasons for giving his blessing to SOFI stock. With that in mind, let’s consider the potential catalysts that could benefit SoFi Technologies in the coming months.
How Will Student Loan News Affect SOFI Stock?
SoFi Technologies is known as an all-in-one, technology-enhanced personal finance solution. However, to be honest, lending is a major part of SoFi’s business model.
That’s not a bad thing, though. In 2023’s second quarter, SoFi Technologies’ total net lending-segment revenue increased 29% year over year. That’s not too shabby, considering this occurred during a time when stringent Federal Reserve monetary policy dis-incentivized lending and borrowing activity.
Furthermore, SoFi Technologies helps federal student loan borrowers refinance their loans. Required federal student loan repayments resume at the beginning of October.
That’s not great news for the borrowers, but it provides a tailwind for SoFi Technologies. And, it’s a factor that I believe the market hasn’t fully priced in to SOFI stock, which is still far below its summertime peak of $11.70.
SoFi’s Deposit Growth and IPO Ambitions
Even beyond the resumption of student loan repayments, Cramer may have other reasons to like SoFi Technologies’ prospects in 2023. Notably, SoFi easily survived the regional banking crisis earlier this year. Now, the company has a fast-growing deposit base.
In a recent interview, SoFi Technologies CEO Anthony Noto touted his company’s rapid deposit influx.
“We’re really stealing share from the big banks, and so we’ve been able to add more than $2 billion of deposits in each quarter since getting our bank license,” he said, “and we reported in Q2, we remain confident that we can add $2 billion plus each quarter, and we’re on track to do that.”
It’s also encouraging to witness SoFi Technologies getting into the business of underwriting initial public offerings. Impressively, SoFi served as an underwriter of the IPO of grocery delivery app provider Instacart (NASDAQ:CART).
To quote the Financial Times report, “Winning a role on one of the most high-profile US listings of the year is a milestone for SoFi.”
I fully agree, as it shows how far SoFi Technologies has come from its early years as a relatively unknown personal finance app. Today, SoFi is a legitimate and respected bank with serious clout.
You Can Like SOFI Stock Even If Cramer Does Too
Some folks like Cramer, but others don’t. However, even if you’re not a fan of Cramer and Mad Money, you can still find reasons to like SoFi Technologies.
Student loan repayments are only part of the story. The big-picture theme is that SoFi Technologies is proving itself as a bona fide bank that could actually threaten old-fashioned financial institutions.
So, whether you like Cramer or not, it’s smart to own at least a few shares of SOFI stock.
On the date of publication, David Moadel 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.