SoFi Technologies (NASDAQ: SOFI)
Down 37% year to date, SoFi Technologies has continued to experience extreme volatility despite posting healthy growth numbers, mostly thanks to a historically high valuation. Their PE sits at 37 right now which is actually quite reasonable given their EPS growth estimates, but volatility risk inevitably comes for anything with a high valuation; particularly when net income guidance is not as strong as investors expect. And despite a recent plateau in net income, analysts still expect growth in the mid-to-high teens over the next several years and continue to rate the stock highly.
Member growth is up 35% year over year and they have beat or met all 4 of their last earnings calls. We have SOFI stock rated a Strong Buy with a +27% one-year forecast, and analysts have rated it a Buy with a +42% upside.
Robinhood Markets (NASDAQ: HOOD)
Up 42% in the past month, Robinhood has emerged from its recent dip and has reclaimed its spot as one of the strongest-performing fintechs stock on the market. With a PE of 40, it matches its forecasted EPS growth estimates and gives this stock a very fair PEG ratio at 1.1.
They have beat 3 of their last 4 earnings calls and the stock has seen an almost equal share of insider buying and selling over the past 3 months. We have HOOD stock rated a Strong Buy with a +26% one-year forecast, and analysts have rated it a Buy with a +32% upside.
Conclusion
Both SOFI and HOOD are highly regarded growth fintech stocks, and picking one of the other is difficult due to their similarities. SoFi does offer a slightly more diversified geographical service area (particularly in South America) while Robinhood is considered to be the major player. Thus, we recommend buying an equal weighting of these stocks as that serves to lower the overall risk profile using diversification while still benefiting from the healthy forecasted growth of each company.
Topics: SOFI stock price prediction, HOOD stock review and analysis
