 Hey everyone, this is Dan with another episode of my SOFI videos. SOFI Bank or SOFI Technologies announced their Q3 earnings yesterday, October 30th. The stock has gone up from $687 the day before announcement to $755 today, which is October 31st. When I posted my last SOFI video on May 9th, 2023, the stock price was only $5.47. In my last video, I predicted that SOFI would be at $14 a share by the end of 2024. The stock has certainly moved in the direction that I predicted. I'm still bullish on SOFI and I have updated my fundamental analysis for the stock and set a new price target. Let's talk about the latest and the greatest related to SOFI. First of all, let's look at how SOFI has been trending in the last year. Compared to the broad market, as you can see, SOFI went up more than 30% in the last year. QQQ, representing the movement of NASDAQ 100, has been up 26%, SPY representing the movement of S&P 500 is up 8%. The banking ETF XLF, unfortunately, went down 4.8%. SOFI has certainly outperformed the broad market and definitely outperformed the general financial sector. If we look at the last 10 days, SOFI is down 9% when QQQ and SPY are down about 5%, while XLF is down about 3%. The positive story is that SOFI went up quite a bit after the 10-30th Q3 earnings announcement. We will talk more about what's in the Q3 earnings announcement and what that means for the future of SOFI. SOFI Bank's official name is SOFI Technologies. They are an online bank. They have three main operations, lending, technology platform, and financial services. This is a list of SOFI's products according to their official website. I highlighted a few items. As you can see, they make a lot of loans and mortgages just like a typical bank. In addition, they offer investment services like the stock brokerage and offer IPO investing and cryptocurrency trading. They also sell insurance policies. Those two items here, SOFI Insights and SOFI Atwork, are not too self-explanatory by the names. I looked further into their website and found that SOFI Insights has to do with providing an easy-to-use dashboard for their customers, help their customers do budgeting, provide free credit score, and provide some safety and protection as far as internet security. SOFI Atwork, on the other hand, is geared towards what employers can offer to their employees. The services include student loan repayment, five to nine college savings, tuition reimbursement, and student loan verification. Their Q3 earnings report showed the following. SOFI beat estimates on both the top and bottom lines. They also raised their full-year outlook, which is very bullish. CEO Nato said, as opposed to popular belief, student loans are not a big driver of the company's quarterly performance. They have other areas that are performing very well also. And 67% of the company's absolute revenue growth in the quarter was non-lending driven. Both the company's technology and financial services businesses did very well. When you look at the chart for SOFI's members or customers, you can see it's been growing steadily. Their lending products and service products have also been growing steadily. This is the income statement from the Q3 report. I boiled down the numbers on this page to a chart that I'm going to show on the next page. I'm showing here the quality revenues and costs for SOFI. And I extrapolated the lines into the future. The orange line is a cost for each quarter. The blue line is a revenues. We can see that the revenues have been trending up steadily along this straight line. The costs were trending along the straight line, but took a jump for Q3 2023. SOFI received regulatory approval to become a national bank in January of 2022. They have been trying to expand rapidly ever since. Like most other fast-growing startup companies, they have been showing negative net incomes in the last few quarterly reports. After I read the fine lines in the Q3 financial report, I found that the jump in Q3 costs is mainly due to $247 million of write-off in Goodwill on their balance sheet. According to Investopedia, Goodwill is an intangible asset that is associated with the purchase of one company by another. Specifically, a Goodwill definition is the portion of the purchase price that is higher than the sum of the net fair value of all the assets purchased in the acquisition and the liabilities assuming the process. I looked through the SOFI Q3 financial report and investor presentation. I also searched the Internet and could not find more details on this Goodwill impairment charge. Anyway, the Goodwill impairment charge is a one-time charge and does not reflect the efficiency of their continuing operations. I'm therefore not worried about a Goodwill impairment charge. If you ignore the effect of the Goodwill impairment charge, we can redraw the chart of cost versus revenues. With this chart, we can see that SOFI would achieve break-even in the fourth quarter of 2023. In the Q3 earnings presentation, SOFI management also mentioned that they will break-even during Q4 2023. Based on this chart, the management's claim is certainly very believable. If you like what you've seen so far, please click the like, subscribe and notification button. It will allow you to receive notification when I post my next video. It will also help with the ranking algorithm within YouTube. Thank you. Let's continue. We have a lot of interesting stuff to cover. Let's look at how much SOFI is worth. I started with checking the PE ratios for the leading banks and also looked at Block and PayPal, the two very large online financial companies. We can see that the trailing PE ratios range from 7.1 to 28, with the online players Block and PayPal commanding the higher PE ratios. If you remember the chart that we showed a few seconds ago for SOFI, I extrapolated this chart all the way to the end of 2024. I then added up the projected net incomes for 2024 and calculated the EPS based on the number of shares outstanding today. I assume a PE ratio of 7, which is very conservative, compared to the PE ratios of the other financial entities. I arrived at a calculated stock price of $11.82 for the end of 2024. Based on these calculations, I projected a very conservative price of $11 a share or above for SOFI to be reached by the end of 2024. When SOFI starts showing a positive EPS in Q4 of 2023 or Q1 of 2024 the latest, I expect the stock price to jump up. That's why I'm so bullish about SOFI. Let's see what the professional analysts have been saying about SOFI. Compared to the last time I looked at the analysts' opinions, which was May 8th of 2023, the closing price went up from 5.47 to 7.55 today, definitely moving up. My target price has been changed from $14 to $11 by the end of 2024, which is still quite a bit of upward movement that I'm predicting from today. Yahoo Business says it's a buy rating, but they downgraded within buy rating from 2.1 to 2.8. The high price target went up from $10 to 16. The average went up from 7.5 to 9.97 and the low price target actually went down from 5 to 3. Overall, the Yahoo ratings are bullish. Louis Nevilleur improved his rating for SOFI from hold to buy and improved the overall rating from a C to a B. The quantitative rating improved from C to B and the fundamental rating actually went down from B to C. TipRanks.com gives SOFI a hold rating, actually a little bit of a downgrade from the previous buy rating. The high price target went up from 10 to 15. Average price target went up from 7.63 to 9.5. Low price rating went from 5 to 3. CM Money changed the rating from buy to hold. The price target for the high side went from 10 to 15. Definitely an improvement. Medium price target 7.75 improved to 9. And the low target went from 5 to 3. Since October 2023, two professional analysts upgraded SOFI. The most recent upgrade by Morgan Stanley definitely has a very bullish effect on the stock price. If you look at the price targets, you can see that since June of this year, even though some of the analysts downgraded the stock, they have been raising their price targets, which is another bullish sign for the stock. You might remember that earlier this year, several banks failed, mainly because the Federal Reserve banks have been raising interest rate very quickly and the interest rate increase was too fast for these banks to react properly to protect themselves. The failed banks included Silicon Valley Bank, signature bank, First Republic Bank, and Credit Suisse. I discussed this topic extensively in my May 9 video for SOFI. I explained why SOFI is in a much better position than those failed banks. If you're interested, please refer to that video, which is in my YouTube channel. In the May 9 video, I also explained why I believe SOFI's financial statements are more conservative than the financial statements of the Silicon Valley Bank and more conservative than even JP Morgan Chase. That's because SOFI has not been hiding their risks related to rising interest rates, as much as the other banks. In the May 9 video, I also provided several reasons why I believe SOFI is much stronger than the failed Silicon Valley Bank. SOFI has some other strengths as well. For example, their unbalanced sheet, delinquency, and charge of rates are still below their pre-COVID levels. SOFI managed delinquency risk by maintaining extremely high credit standards and they purchased hedges against interest rate movements. SOFI's checking and savings members have very good protection. Because of this innovative program SOFI established with other banks, they provide up to $2 million of FDIC insurance. A typical savings account in other banks is usually protected by FDIC for only up to $250,000. SOFI and BlackRock recently partnered on $375 million of personal loan securitization. That's a big vote of confidence on SOFI from a very big and reputable financial institution like BlackRock. That's definitely very bullish for SOFI. Let's look at insider trading activities of SOFI. The green bars here show buying activities. The red bars here show selling activities. When we line up the stock price with the insider trading activities, we can see that after the high volume of insider buying back in December of 2022, the stock price went up in January of 2023. And after the high volume selling here, here, and here, the stock price went down soon after. Fortunately, we don't see a lot of insider selling in the last few weeks. I'm therefore optimistic about the stock price in the next few weeks. What are my investment strategies related to SOFI? I've been buying and selling SOFI shares since April of 2023, and I've made some profits. I bought SOFI shares again right after the March CPI numbers were released on April 12, 2023. Most recently, I bought SOFI shares on October 27 at $7 a share when SOFI and the broad market started to rebound at that point. Aside from following my fundamental analysis to keep a certain number of SOFI shares for the long term, I will observe broad market trends and support and resistance levels so that I can swing trade SOFI shares to maximize my profit. I will notify my Twitter or ex-subscribers when I buy or sell SOFI shares in the near future. At this point, I'd like to suggest that you subscribe to my Twitter account, which is DanMarketL, in addition to subscribing to my YouTube channel. I notify my Twitter subscribers almost on a daily basis about my latest stock market analyses and my trades. For example, on September 13, I tweeted that I sold half of the SOFI shares that I bought on September 7th at 3.7% gain. And then on October 27th, I tweeted that I bought SOFI at $7 a share. As of today, it's at 7.55%. I'm therefore seeing a 7.8% paper gain already. If you like what you've seen, I'd like to remind you again to click the subscribe, like, and notification buttons. As usual, I will very much welcome your comments, questions, and suggestions. I'd like to remind you that I'm not a financial advisor. I share my stock trading strategies and analyses for educational and entertainment purposes only. If you want to buy or sell stocks, you should make your own decisions and you should definitely consult with your financial advisors before you do so. This wraps up my video for now. I will chat with you again in the next few days. In the meanwhile, I'd like to wish you the very best of luck with your financial investments.