Meet the high-growth stock that could make you a millionaire

After being largely ignored by the market for several years, at least in terms of share price, SoFi‘S (NASDAQ:SOFI) The stock performance finally reflects the bank’s excellent growth momentum and future potential. However, if the bank continues as it is, it could easily double in size or more in the next few years.

While it’s not the least risky bank stock, SoFi could make sense from a risk-reward perspective. Here’s an overview of the company’s current state, some future growth catalysts to keep an eye on, and why the recent stock performance could be just the beginning.

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SoFi started as a student loan refinancing company but has since evolved into a fully-functional online bank. It offers checking and savings accounts, brokerage accounts, personal loans, mortgages, credit cards and more.

The progress has been impressive and will continue to be so. Last quarter, SoFi added 756,000 new members, more in a single quarter than ever before, and is seeing particularly strong momentum in its financial services products, including things like checking and investment accounts. Revenue was up 30% year-over-year, adjusted EBITDA was up 27%, and SoFi is a profitable bank, even on an unadjusted basis.

SoFi’s banking business is particularly impressive considering that it started from scratch in early 2022, when the company received a banking license. SoFi now has more than $24 billion in deposits, almost enough to cover its entire loan portfolio. The growing deposit base could also make SoFi a big winner from the Federal Reserve’s interest rate cut, as the cost of deposits is currently at 4.19% and could fall sharply over the next few years.

Although the progress is impressive, SoFi has a lot of opportunities in its business. Its mortgage lending business could be a key growth driver if interest rates fall, and there are several types of lending and banking products SoFi could offer.

However, there are some concrete growth catalysts that could pay off in the medium term. One of them is the granting of personal loans to third parties. SoFi recently signed an agreement to raise up to $2 billion in loans for investors and is actively referring applicants to partner lenders rather than using its own money. This could lead to a rapidly growing stream of capital-poor income.

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