Key Points
Lower interest rates can drive higher demand from borrowers, which can support revenue gains.
This stock has soared 240% in the past year, but higher earnings can keep the party going.
Investing behind powerful secular trends can lead to fantastic results. In the past decade, the growth of companies blending financial services with technology has been a notable development. Many businesses operate in this niche.
But one of them stands out. And its shares have climbed 240% in the past 12 months (as of Oct. 8). Here's why it's still the top fintech stock to buy before the end of 2025.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
The Fed's accommodative stance could boost lending activity
The Federal Reserve lowered its benchmark interest rate last month. And there could be more rate cuts on the horizon. For companies that lend money, like SoFi Technologies (NASDAQ: SOFI), the benefit of a more dovish central bank is clear.
As borrowing costs come down, demand for loans should tick up. This can lead to greater revenue potential. SoFi's total loan originations are already growing at a brisk pace, up 66% in Q2 (ended June 30). They could go higher in the near term.
SoFi shares aren't cheap, but the earnings trajectory makes up for it
At a forward price-to-earnings (P/E) ratio of 47.2, on the surface, SoFi shares do not look cheap. And for investors looking at the stock for the first time, it can be disheartening knowing that the forward P/E multiple has expanded considerably in the last six months.
Consider, though, that SoFi's diluted earnings per share jumped by 367% in the second quarter. And analysts expect a similar trend in the years ahead.
Should you invest $1,000 in SoFi Technologies right now?
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
