SoUndervalued: Part 2, Fintech multiples: If you haven’t read part 1, I suggest you start there. It gives some background on how I think about valuation, why I don’t think tangible book value is the right metric for SoFi, and results of a few different discounted cash flow models, I’m going to quickly list the guiding principles I have for valuation again here because they’ll be important for the discussion below:
July 18, 2024, 10:11 p.m.
SoUndervalued: Part 1, Bottom Up Valuation and Book Value: Valuation, like everything else in investing, is only useful with the proper nuance and context. There is no single number that tells the whole story for any company. That being said, I think it would be wise for me to start this article by talking generally about how I look at valuing investments. The guiding principles for me are as follows:
July 11, 2024, 2:09 p.m.
This is How SoFi Beats the Bears: One of my favorite scenes from the Dark Knight trilogy is where Coleman Reese, a Wayne Enterprises employee, confronts Lucius Fox (one of Batman’s right-hand men along with Alfred) after discovering that Bruce Wayne is Batman. He lays out clear evidence of what he has found before telling Lucius, “I want ten million dollars, a year, for the rest of my life”. Fox’s answer is brilliant.
June 24, 2024, 9:45 p.m.
SoFi: Going from 0 to 60 (cents of EPS): SoFi stock has been really weak even as the S&P 500 and other indexes see all-time highs. Sentiment in the investor community is absolutely near all-time lows. Sentiment follows price and the price action has not been good. I don’t really care about any of that because I see a business that has outperformed every competitor and is fundamentally getting stronger with each passing quarter. Hopefully this article can help people take a step back and see the
June 11, 2024, 9:38 p.m.
Final thoughts from SoFi Q1 Earnings: Just a few more tidbits that I found interesting or enlightening from the recent SoFi earnings report. Financial Services Revenue and Margins Cross sell has not been as strong as I’d hoped it would be. In fact, it is actually getting slightly worse. Total products per member since before they went public is shown below. One partial explanation is that they were forced to exit their crypto offerings, which certainly had a detrimental effect on the number of S
May 22, 2024, 3:12 p.m.
Additional Insights from SoFi Q1 Earnings: As I have continued to review the SoFi Q1 earnings, here are some of the more interesting things I’ve noticed that I thought it would be interesting to share. Stock-Based Compensation I’ve been in SoFi long enough that I was around when stock-based compensation (SBC) was one of the biggest bear cases against the company. In fact, the very first ever call I had with anyone inside of SoFi was with CFO Chris Lapointe about this very subject. Partially lost
May 15, 2024, 8:47 p.m.
SoFi Q1 2024 Earnings Review: A Good Quarter but a Few Questions Remain: I said this quarter was going to be the hardest one to predict so far. It was also, in my opinion, one of the more underwhelming quarters that SoFi has had, but that is only because they have set a very high standard. Last year’s earnings reports were excellent across the board, and Q2 and Q3 were especially exceptional. Q1 of 2024 was a good quarter, but there were several aspects of it that are kind of “meh”. I’ll go back
May 1, 2024, 12:49 a.m.
