SoFi Technologies (NASDAQ: SOFI) went public in June 2021 following a SPAC merger orchestrated by venture capitalist Chamath Palihapitiya. Since then, the stock has underperformed the overall market and the stock price has fallen 31% from its all-time high. Even so, investors shouldn’t give up on SoFi yet.

In this Backstage Pass video, which was registered on November 8, 2021Motley Fool contributor Trevor Jennevine shares his thoughts on this fintech company, providing insight into SoFi’s business and why stock still looks like a good investment.

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Trevor Jennevine: SoFi’s mission is to help people achieve financial independence so that they can achieve their ambitions. In general, I think it gives a pretty good picture. To achieve this, the company offers a range of different products and services which broadly break down into lending solutions and financial services solutions.

I’ll get to them in a moment. But one of the things it does is take that first mobile approach. When members access the mobile app, their home feed gives them personalized advice every day. So he gives them three tips: he tells them what to do, what to do, and what they can do to improve their financial well-being that day. So I love that they – the name of the company is social finance – I love that they put that personalized social feel into the app.

Then its loan solutions are personal loans, student loans, home loans. And then, it provides a range of financial services like fund management accounts through SoFi Money. It involves a link to a debit card, you can save, spend, earn interest. SoFi is not currently a bank. They rely on partner banks to provide these services. I’ll get to that in a minute. But there is also the SoFi Invest brokerage. There are a few interesting aspects about this that I think may appeal to particularly young investors, such as cryptocurrency trading. SoFi Invest has its own ETF which pays weekly dividends and allows investors to participate in IPOs. I think some of these things maybe differentiate the product a bit. Then there are other solutions like the SoFi credit card where the company issues payment cards. They have cash back rewards. If you put these rewards in another SoFi product, you get double the rewards. There is also SoFi Protect where consumers can purchase insurance, through partner insurance providers, third party partners with SoFi. The company also acquired Galileo in 2020. It is a payment processing platform that essentially enables financial companies to provide digital banking services. If you need to issue payment cards or create accounts or offer direct deposits, mobile payments, account transfers, Galileo provides the infrastructure to make it happen. This actually powers some well-known fintech companies like Chime, Robin Hood, Silver Lion, and Wise, formerly TransferWise.

I think people probably recognize some of these names. I wanted to talk about the finances of the company. This business is growing so fast. This slide shows the members. Membership growth has accelerated over the past eight consecutive quarters. The most recent quarter was up 113%, to nearly 2.6 million members. Then the products that these members use grow even faster. You see that also accelerates sequentially. Most recently, up 123% to nearly 3.7 million products. Product growth exceeds that of members. Each member uses more products, generating more income. Vertical integration allows the company to recognize incremental profitability as these members adopt more SoFi solutions. Then this slide shows that Galileo accounts are also speeding up. In the last quarter it has gone down a bit. It continues to grow at a triple-digit rate, 79 million accounts on Galileo.

In general, the financial performance of the company seems very strong at the moment, the members, the products, growing rapidly. In the first half of 2021, the company generated revenue of approximately $ 427 million, an increase of 121%. They show positive free cash flow with just under $ 56 million free cash flow in the first half of the year. This is down from last year. The company invests quite aggressively in growth. But it’s always good to see positive free cash flow.

I’m not a shareholder here, but this one is pretty high on my list. I would put my investment thesis in this slide. I love that SoFi provides this comprehensive suite of mobile-focused lending and financial services products. I think making this accessible through a platform makes it easier for users. I think the range of products they offer really helps the company build lasting relationships. Whether it’s student loans when you’re younger or your first brokerage account or something like a home loan later on, credit cards offer many different products. I think I mentioned vertical integration earlier and management sees this as a key benefit: once a customer uses a product, they don’t have to pay so much in terms of marketing to bring it on board for a second product. They can market directly through their mobile application. Revenue grows faster than operating expenses with each additional product. I think this has been a key factor in the strong financial performance of the company recently.

Then one more thing I would like to mention, in March 2021 SoFi applied to become a bank holding company to the Federal Reserve. It also announced its intention to acquire Golden Pacific Bank [owned by Golden Pacific Bancorp] for just over $ 22 million. Assuming that all goes well, and once this process is completed, SoFi having a national banking charter could really transform its business, could boost its growth. For example, as I mentioned, SoFi currently relies on banking partners to provide its money management solutions through SoFi Money. Once the society has a banking charter, it will be able to provide deposit accounts to its members. She can turn around and use those deposits to fund loan products. This creates a cycle where borrowers are expected to benefit from lower interest rates, SoFi will be able to pay higher interest rates to SoFi Money account holders, creating even more value for platform members. .

Trevor Jennevine has no position in any of the stocks mentioned. The Motley Fool owns shares and recommends SoFi Technologies, Inc. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.