Is SoFi Stock (SOFI) a Buy in October?

SoFi Technologies (NASDAQ: SOFI) stock has been very good to investors lately. It's up by a whopping 450% over the past three years. But the party is far from over, and investors could still gain a lot by investing in SoFi stock today. In fact, if you've been on the fence, now might be just the right time to finally jump in.

Image source: SoFi.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »

The new way to bank

SoFi is an all-digital bank that's challenging the big players in U.S. banking. It's attracting interest from younger, tech-savvy customers who want digital-first options in their pockets, and who are looking for simple, easy-to-use services as they approach financial management for the first time.

What started out as a cooperative for funding and refinancing student loans is now a complete financial platform offering all the standard banking services as well as innovations designed to appeal to its core clientele. These are products like access to private equity funds and cryptocurrency trading, and management recently announced that it will add more blockchain-based products to the platform.

SoFi has been delivering outstanding results. Its adjusted net revenue growth accelerated in the second quarter to 44% year over year, and earnings per share (EPS) skyrocketed by 700%. It has been making more money from its low-cost, fee-based products, which are adding sales and padding the bottom line.

As the students and young professionals who make up its core customer base advance through their lives, get higher-paying jobs, and have more complex financial management needs, they're interacting more with SoFi's platform. This evolution is central to the company's growth strategy. Meanwhile, it's attracting new customers and adding products at a high rate. Both of those metrics increased 34% year over year in the second quarter.

More good news on the way

The gradual decline in interest rates has been a positive trend for SoFi, since lending is still its largest segment. It originated a record $8.8 billion in loans in the second quarter, with strength in all of its categories, but particularly in home loans, which were up 92% from last year.

SoFi's stock price is actually down over the past month, along with many other bank stocks, as U.S. economic indicators remain mixed. That means that as the bank heads toward its third-quarter earnings report on Oct. 28, you can get its shares for a better price.

There's no way to know whether the market will be impressed with that earnings report. Quarterly results have been varied among the banks that have already reported. And SoFi's still-high valuation means it's more susceptible to bad news sending the price down. However, long term, SoFi has incredible opportunities, and you could buy today based on optimism about what it will report next week, so long as you can comfortably hold on to the stock for at least the next few years.