SoFi Stock (NASDAQ: SOFI) A Pre-Market Gainer | Do 1 Month Gains Indicate a Momentum Shift?

Despite the tech sector's magnetic appeal, investors looking beyond the buzz may find promising growth potential in fintech stocks, such as SoFi Technologies (NASDAQ: SOFI). Over the past 12 months, SoFi’s performance has lagged nearly 50% behind the broader S&P 500 index and a YTD performance 24% in the red does not get pulses racing for the right reasons.

In the past month however, the company's share price has risen 13.5% with recent activity indicating a turnaround might be on the horizon for the stock. The pre-market session also has SOFI trading green to the tune of 1.64%.

Analysts at Deutsche Bank have taken an optimistic stance on SoFi, setting a price target of $11 per share, which suggests a 50% upside from recent levels. This positive outlook could be a harbinger of a pending rally for the company's stock.

Adding credibility to SoFi's growth potential is the investment behavior of The Vanguard Group, the company's largest shareholder. Vanguard recently increased its stake by 1.7%, now holding a hefty $604.6 million in SoFi stock. This vote of confidence from a major institutional investor often portrays strong growth prospects.

Inside the company, there's evidence of confidence as CEO Anthony Noto purchased 30,715 shares. At an average price of $6.48 per share. Insider buying is typically viewed as a strong bullish signal by the market.

SoFi's promising trajectory is further supported by its robust growth metrics. The company's net member base has surged to 8 million, marking a 44% leap year-over-year. In terms of the bottom line, revenue climbed to $581 million in the first quarter of 2024, which represents a 26% increase year-over-year.

The upward trend continues on the income front, with SoFi flipping the script on its financial performance. A net loss of $34.4 million in 2023 transformed into a net income of $88 million in 2024. Achieving profitability amidst challenging market conditions speaks volumes about the company's resilience and operational efficiency.

The combination of insider buying, increased institutional investment, and healthy financial growth paves a potent path for SoFi's stock but as always, looking at the broader picture of fundamentals will give you a better idea as to personal suitability. Let's not forget this is still a stock which has been trending downward over the longer-term, and jumps in price have taken place a few times over the years without a sustained upside push.

There is likely still plenty to do for SoFi if it is to maintain bullish sentiment, but with earnings looming at the end of July, we will watching for continued operational improvement.