The Market May Be Getting It Wrong With SoFi

Once a fintech darling, SoFi Technologies (SOFI) is off nearly 33% year-to-date. That’s a bear market and then some. But some investors believe the market is misunderstanding the SoFi story — one that includes a capital-lite model, among other favorable traits.

The battered stock needs to nearly double to return to its 52-week high. That’s a data point relevant to investors with long-term views on SoFi. If those market participants are correct in their assertion that the stock is a viable rebound candidate, there should be ample opportunity for short-term traders to make use of the Direxion Daily SOFI Bull 2X ETF (SOFA).

SOFA attempts to deliver 200% of the daily returns of the fintech stock. Of late, some signs emerged that SOFA is worth keeping an eye on. For example, SoFi CEO Anthony Noto has bought shares of the company on five separate occasions this year. That could indicate that he sees value in the stock. For traders evaluating SOFA, there are encouraging factors to consider.

Compelling Case for SOFA

SoFi recently became the first company with a national bank charter approved to bring a stablecoin to its members. The SoFiUSD stablecoin is now available to its customers to buy, sell, hold and use for transactions in the app.

That makes SoFi the “only U.S. bank able to issue SoFiUSD with reserves held directly at the Fed, reducing credit and liquidity risk while competitors await GENIUS Act rulemaking, positioning SoFi as an infrastructure provider for the next financial system,” noted EveryTicker.

The research firm highlighted another potential catalyst for occasional use of the geared SOFA. SoFi is deftly navigating a transition from traditional balance sheet lender to a capital-lite fee generator with impressive optionality. The firm has the flexibility to hold loans or sell them on the open market to third parties. By doing so it can generate immediate fee revenue and reduce risk. Plus, the stock is attractively valued.

“Trading at $15.61 with a P/E of 34.7x and P/S of 5.1x, SoFi sits at a discount to high-growth fintech peers while offering superior diversification and a clear path to 20-30% ROE targets, making the recent 44% correction from 52-week highs a potential entry point as fundamentals outpace market sentiment,” added EveryTicker.

Another potential catalyst for SoFi and SOFA is the acquisition of Composer Securities. That serves as the foundation for Composer by SoFi. The artificial intelligence (AI)-powered investing platform is about much more than AI agents trading for clients.

“Composer uses AI to help investors build sophisticated rules-based strategies that are executed automatically according to clear, predefined rules,” according to a SoFi statement. “These rules can be refined with specific weights, conditions, and filters. This means investors maintain visibility into how their strategies work and can evaluate historical performance across different market environments before deciding whether to activate a strategy.”

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