Tech stocks are out of favor at the moment. You don’t need to look much further than Peloton, down over 80% from its highs to know that high growth stocks have been tossed out of portfolios with abandon.
And while some companies deserve to have their valuations chopped up, others have strong fundamentals and are growing at a rapid pace yet their share prices are not reflecting the positive news.
With that in mind, let’s take a look today at 2 hot stocks that have the potential to 4x over the next 10 years.
SoFi Growing Fast In Competitive Market
SoFi isn’t your run-of-the-mill financial services firm. It’s fully digital so you can’t walk into a brick and mortar location on main street as you can with Chase or Bank of America.
The company’s origins are in the student loan industry but since then the business has expanded to personal loans, mortgages, wealth management and even deposit accounts.
SoFi’s share price took a tumble since the beginning of the year. It’s been cut in half and then some on revised full-year revenue guidance and adjusted EBITDA. It’s not a surprise to see SoFi shares get monkey-hammered because of a moratorium on student loan payments. In spite of the negative news, SoFi has shown positive catalysts under the hood that should excite investors.
For one, the company is on target when it comes to growth objectives: 400k new members were added during Q1 2022 alone. In total, SoFi has close to 4 million members.
Where SoFi stands out is its ability to cross-sell these members during their financial lifecycles. It can offer student loan financing to HENRYs (high earners not rich yet) when they are at school, then a mortgage when they graduate, and wealth management as they build savings later in life.
Naysayers will argue that personal loan volume is up and that suggests the company’s base is stretched financially. This point is true. But arguably it’s a short-term situation in a tough economic climate versus a long-term concern for SoFi. Indeed, high-earning borrowers are more likely to pay off those personal loans quickly, rise through the corporate ranks faster, and get their financial house in order more rapidly than the average personal loan borrower.
Over the long-term, SoFi has all the hallmarks of a successful technology company that can thrive in a competitive landscape where others have faltered. Look no further than its arch-rival CommonBond exiting the student loan space entirely as evidence of that.
Planet.com Lands Important NRO Deal
Whether you are a climate change advocate or not, there is one thing you can agree on: corporations are embracing ESG initiatives. CEOs like to be associated with sustainability, fair governance, and good treatment of stakeholders. That means companies supporting such initiatives offer significant opportunities for investors.
One such company is Planet.com, which captures photographically the topography of the earth daily at resolutions higher than competitors. The applications of such data are yet to be fully realized. The obvious applications are for governments keen to know, for example, how troop movements and infrastructure are changing in war zones from one day to the next. Or for farmers to know how landscapes are evolving and at what pace.
But so many other applications are yet to be uncovered when capturing data that ranges from avalanches to lava flows.
Most recently Planet.com won a 5-year contract with the National Reconnaissance Office (NRO) and share prices soared. The size of the deal was not initially announced because Planet was in a quiet period pre-earnings.
Make no mistake about it, though, that deal is likely to be the first of many with governments globally. And public service deals are just the tip of the ice-berg for Planet.com, which has a massive opportunity in the private sector too.
With share prices well under their SPAC launch date levels, it would not be unreasonable at all to expect Planet.com to 4x over the next 10 years.