Is SoFi Technologies (SOFI) A Smart Long-Term Buy?

RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) returned -3.23% for the third quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 0.58%, the Russell 1000 Growth Total Return Index (“RLG”) returned 1.16%, while the Morningstar Large Growth Category returned -0.07%. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

RiverPark Large Growth Fund, in its Q3 2021 investor letter, mentioned SoFi Technologies Inc. (NASDAQ: SOFI) and discussed its stance on the firm. SoFi Technologies Inc. is a San Francisco, California-based personal finance company with a $13.1 billion market capitalization. SOFI delivered a 32.07% return since the beginning of the year, while its 12-month returns are up by 57.68%. The stock closed at $16.43 per share on December 02, 2021.

Here is what RiverPark Large Growth Fund has to say about SoFi Technologies Inc.  in its Q3 2021 investor letter:

SoFi is a neobank or digital bank, operating exclusively online without any physical branches. The company provides a comprehensive consumer finance product suite including credit cards, student loan refinancing, mortgages, personal loans, and automated investing. SoFi has a $2 trillion dollar market opportunity by taking share from incumbent banks (such as Wells Fargo and Bank of America), as the incumbents have first generation technology, and the younger generation generally prefer digital banks.

Last quarter, SOFI grew its customers by 113%, its total products sold by 123%, and its revenue by 101% and turned EBITDA positive. We expect the company to grow revenue by more than 30% annually for the next several years and grow its margin by cross-selling more profitable products—with low or no customer acquisition costs–and increasing scale, leading to profit growth of more than 50% annually for the foreseeable future. We know the SOFI management team well from previous positions over the past two decades and have great confidence in their ability to execute on this enormous growth potential.”

Based on our calculations, SoFi Technologies Inc. (NASDAQ: SOFI) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. SOFI was in 33 hedge fund portfolios at the end of the third quarter of 2021, compared to 39 funds in the previous quarter. SoFi Technologies Inc. (NASDAQ: SOFI) delivered a 9.10% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.