This "Boring" Financial Stock Could Crush Tech Returns

Just about the only way that SoFi Technologies (NASDAQ: SOFI) is boring is because it's a financial services company. Banking...mortgages...student loans...yawn. But hold on -- note that it has the word "technologies" in its name. That's because in its own way, it's a tech stock, and one that could outperform the tech-stock world, in general.

SoFi Technologies is a fintech company -- involved in both finance and technology. It's a bank that's working on becoming a one-stop shop for consumers, helping them save, spend, and invest via an app that also gives them access to financial planners and more.

Image source: Getty Images.

The stock has been on a tear recently, averaging annual gains of 77% over the past three years, up 176% over the past year, and up 87% year to date (as of Oct. 22). Wow. SoFi Technologies has already crushed lots of tech stocks, performance-wise, in recent years. Consider that over the past year, it's even ahead of semiconductor superstar Nvidia, which is up 26% -- perhaps catching its breath.

In its second quarter, SoFi Technologies posted revenue up 43% year over year and net income up 459%. Better still, the company said a "record 850,000 new members joined SoFi in the quarter, up 34% from the prior year to 11.7 million."

The company can't keep posting triple-digit growth rates forever, but it can keep growing at a rapid clip for a while, likely long enough to keep trouncing the growth rates of many tech companies.

Think twice before jumping in, though, because shares aren't exactly bargain-priced at recent levels, with a recent price-to-sales ratio of 11 far above its five-year average of 4. Investors might want to buy shares gradually, or wait for a better price. In the meantime, you might look at some compelling tech stocks that are more reasonably priced.

Selena Maranjian has positions in Nvidia and SoFi Technologies. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.