Hey, this is Tom and let's talk about Sofi This is a brand new series called the Best Stocks To Buy in which we take a stock, dissect it, analyze it, and see if it is indeed a Best Stock to Buy or not now. Sofi which is the stock we're covering today is probably the most requested stock on my Channel with the exception of Palantir and Tesla As you would expect and in this video, we're gonna dissect it now on my little whiteboard behind me. As you can see here: I Have all the parameters listed and don't worry if you can't see it. I'm going to share it with you, but essentially it's about management.

It's about the balance sheet, the growth, the margins, the deal quality, the short interest, the potential. Don't worry if these are code words to you right now by the end of this video, this is gonna be super simple and you'll understand it completely now. This video has to start with where Sofa used to be back in 2021 when things were great. Now this stock used to be 25 a pop, 25 a pop back in 2021.

Now, ever since then it has gone down to eight and a half dollars. and even though it had a phenomenal run over the last few weeks last few months, it's currently down 10. But it has a crazy crazy run. if I pull up the chart over the last three months, it's done 60.

Over the past year, it's done 57. Over the past month alone, it did 82 percent. The stock went through some crazy crazy times, but in the grand scheme of things, the stock is still way way lower than the 25 price tag it had in 2021. So our system today.

we're going to evaluate the stock. We're going to make sure if it's any good. this stock has to go through the ringer in order for us to make that decision. Now before we go forward, I'm going to be using my platform stock MVP Stock Dash Mvp.com It's listed below.

We have a code last 50. the reason it's called last 50 is because we're about to discontinue all codes. we're required to do so because the app just went up on the App Store We're no longer allowed to give out discount codes coupon codes, so this is literally the last few days you have to cop it at 50 off. and if you get it now 50 off, it's for a lifetime.

so you know, make your decision. In any case, let's focus on so far, not my platform here. Now, what we're going to have to take a look at here is the quality of the CEO, the balance sheet, the growth rate, the short interest, the deal quality on the stock, and the overall potential of Sofi. Now look, the stock is up 90 year-to-date That's not as crazy as Palantir definitely not as crazy as Nvidia, but still very, very high.

And we're going to look at the numbers in just a second. But there's other things here in this stock that are a little bit alarming to me. and I'm going to list them. and it doesn't mean I'm bearish on the stock.

Don't jump to conclusions, it just means that I am a balanced objective analyzer whenever you want to evaluate the stock properly. Whenever you want to be objective, you have to look at the good and the bad. You can't be absolutely ignorant to bad red flags. Etc So the first red flag is for me.

obviously the parabolic spike. same thing as Palantir. I've been vocal about Palantir as well. That's why the Palantir community seems to hate me a little bit right now.

But you know, whenever something goes parabolic real quick, it's not super attractive for me. You know, as far as an investment at that point in time now there's a solution to that. I'll explain in a second. there's a system to bypass the formal and the hype.

I'll explain that towards the end of the video. Now, the other thing I'm a little bit concerned about here is: I'm going to show it here in the screen is just the crazy amount of short interest in the stock now on stock. VP You can actually see the short interest right here and you can see it on the screen. It's actually very, very alarming.

It's at 13 12.6 percent, it is very, very high. Not excited to invest in a company with so much short interest. Even Palantir that has a high short interest at eight, eight and a half percent double-digit short interest scares me. The other thing is as I'm going to show you in a second, this company is not profitable yet.

Although they're flirting with profitability, they're really close. but they're not there yet. their way to leverage for my taste. With 6.3 billion dollars of debt, which is way more than two and a half billions they have in cash, they're bleeding like 300 million dollars a year, which is kind of upsetting and not optimal for me.

And I think like Palantir, there's a lot of opportunistic dip buyers that have made a lot of profit over the past. you know, a few weeks few months and they're waiting for the opportunity to take their profits, which is going to put a lot of pressure on the share price in the short term. Now these are my dislikes and before we go through the numbers: I Also have some likes: Number One I Think the stock has probably one of the best CEOs in existence I Think any Anthony Noro is definitely the top 10 CEO in the United States You can research the guy. he knows what he's doing.

he completely turned around so far what it used to be, what it is now what is going to be three completely different things and he has most of the cloud for that. Um, student loans are coming back which is good although I think that's already kind of priced in a little bit into the share price. It rates will come down as inflation comes down. interest rates will have to come down, especially with what's going on with the banking industry.

And that's a huge opportunity for Sofi Because their business is refinancing, interest rates go down, a lot of refinancing activity has to come to the pipeline. They have lots of potential. They have a new bank Charter which you just got by acquiring a bank and you know this company is not trading at super expensive levels. At eight and a half dollars, it's four times price to sales.

Much better than what it used to be at 25 bucks a pop. it has 22 million sorry billion assets versus 17 billion in liabilities which is you know, decent, decent ratio. And to be honest, even though it's very leveraged, it has enough cash to basically operate for eight to ten years without diluting shareholders. Which is really, really helpful for me because I know they have stability, there's no dilution or debt coming, they're burning 300 a year, they're sitting on 2.5 billion and even if they just keep burning cash, they have eight years.

so that's not bad at all. Now looking at this thing right here: I Want to scroll down so I Want to show you these are our stock MVP Quick Cards you can edit your own. these are the ones I Want to show you here. So what I want to show here is first of all is revenue.

At 1.7 billion, it really reminds me a lot of Palantir, but I think there's a 2 billion? there's 1.7 billion. Very similar structure. Growth is actually way better than Palantir at 53. Incredible growth here.

But as you can see, operating expenses are almost broke even 1.6 billion, which leaves us operating income of 56 million. So the company is technically operationally profitable, which is a sign they're about to be profitable for tax purposes and for cash flow purposes, so that's good. but they're just on that borderline. Essentially, this is a break-even company, which is in itself, quite impressive in this economy.

And what I do want to show you is this right here: 2.5 billion in cash and cash equivalents, but 6.3 billion in debt. Very leveraged. Not a huge fan of that. 22 billion in assets as you can see right here we talked about this versus 17 billion liabilities.

Now the valuation here. Look, we don't have price. The earnings naturally because it's not a profitable company. But you know 1.4 Price to Book 4.7 price to sales I mean it's not an expensive company I think I said earlier PE if I did I'm sorry I meant price to sales.

Obviously it doesn't have a P, but you know four to five price to sales at 1.4 Price to Book at a company that's borderline operationally profitable, generating almost 1.8 billion in revenue and growing at 50 a year, that's actually quite impressive. I'm not gonna lie I Think it's a it's A it's a cool number now. I Do want to show you something else here and I'm going to take this off the screen so we can use a different window. Now this is another feature we have here in stock: MVP And this is a way for us to take a look at what analysts are saying about the stock.

As you can see in the corner here, we have the average analyst price Target the average analyst price Target right now and so far is ten dollars which is significantly higher than the current eight and a half dollar share price. but you have low targets of all the way down to two and a half dollars. and I'll show you why those also make sense. and I'm not being hateful on the stock.

I'm just saying. It's definitely. it's possible it's possible that it goes to 10 or 22, but it's also possible to see it two and a half. I'll show you why a lot of the assumptions about this company is going to drive the valuations.

It's not such a simple thing. then you can just you know, kind of assume and run the quick. DCF It's not that simple. This stock requires a lot of nuance.

Now talking about Nuance right here. this is what I was talking to about. This is our SEF SCF Tool Uh, Here we calculate valuations in three different cases on stock. MVP Basically the conservative, the middle ground and the optimistic.

Now I'm not going to bore you with the assumptions that are on the screen. you can pause the video and check our assumptions here and you can plug in your own if you're stuck a VP user. but for us, this is where we are. So the conservative, the bear case for the stock is a three dollar stock very similar to the analyst by the way and the five-year kind of Middle Ground which seems to be the most you know plausible or the most you know.

Probable scenario is 15 a share, which is quite higher than the eight and a half dollars. and the you know optimistic Kathy Wood scenario. that's the 27 per share. so that's the range in which it's going to operate as a Growth Company A lot of speculation.

A lot of risk. You know, high risk High Reward Three dollars, Twenty eight dollars, Twenty seven dollars. It's a big margin. Uh, but the end of the day you have to make a decision if this stock is even good enough because I mean you can't just go based on the on hype and and just say oh, this stock can go to 27 I'm just gonna buy it.

No you have to actually analyze it and see if you like it. So in order to analyze it, you have to learn how to run a DCF a discount cash flow valuation model. Uh, you can do it yourself with a simple Excel spreadsheet. It's not that complicated.

We've built this and this model here for you which makes it for you. It take it, takes data from the financial of the company and it creates its own DCF Right now this is what we have for Sofi based on our DCF Of course you can change the data in yours right now. Rdcf gives us a 10, 10.12 DC evaluation which is a 17 upside on the stock. But of course you know for some people may find this annoying.

If you're a huge sofiable, don't forget my DCF or Palantir is about eight dollars a share. So and I'm I'm the one you know making 500 thumbnails on Palantir. the DCF isn't everything. Yeah, I'm investing in Palantir expecting a 500 per share price even though I see a DCF of eight.

So it's an objective way to kind of gauge what's the current valuation of the company given its current numbers without taking into account any exponential growth in the future. which I think Sofi has a lot of potential to do it. much like Palantir, Sofi has that potential to create exponential growth and in that case, the CCF is meaningless. But as it says right now, it's a 17 upside.

But it's definitely up there as far as potential massive, massive potential. With as far as the bank Charter the all the all-in-one app they're building, it's absolutely insane what they can get to. Um. one last thing here on stock: MVP That I like to look at is what the institutional investors are doing with the stock.

That's the Achilles heel of this talk. It's very similar to Palantir in this aspect. Palantir also suffers from the same problem. That's why I think the Palantir investors are are feeling the pain of the sofa Investors: 37 institutional shareholding.

Palantir has a similar percentage. It's not optimal. We want to see 60 at least institutional shareholding because it adds a lot of stability to a stock. Um, and 37 is just too low.

There's too much retail action, and unless you're Tesla Um, retail investors tend to be a little bit more volatile. and then you see this crazy swings in the share price. so not exciting to see that. The craziness as far as you know.

Um, all this institutional investors not buying into the company as you would expect when you have a company that's not profitable speculative. In times like these institutional shareholders, they tend to take their time on this. And that's okay. Now in my view here, this stock has a lot of potential.

It checks a lot of the boxes. The CEO is great, the balance sheet is okay. The short interest um, at 14 13 is it's it's a tad high for me. and the main problem here is that the stock.

Again, it doesn't get institutional influx. That's why it's being held back similarly to Palantir and unfortunately when you have such a high retail participation much like Palantir, the moment the the buyers decide to jump off the ship because they think it's coming down, it's going to send the stock price down and it's not going to be pretty. But how do I invest in company like this if I have faith in it right? Same answer as volunteer. if I like sofa and I think this is a great company and which a lot of you may think and I can't argue with you I mean there's definitely a case to be made of why this company is probably uh, one of one of The Highest Potential companies in the market right now as far as Fintech for sure.

So again, this is what I do what I do with sofa if I like this talk is something very simple: I decide a dollar amount I'm going to invest every single month into the stock and I keep buying every single month no matter what the price does with one exception which is kind of the pro adjustment to this rule. if I see the price goes below 10 percent off of the 52-week high I have on the stock, then at that point I started doubling down I doubled my amount and I stayed doubled all the way until the stock price climbs back up and it gets to that 10 threshold again and it goes within that 10 range from the 52 week high at that point. I go back to my original amount and I keep putting it every month. The idea here is to slowly build your position over time, slowly dollar cost averaging to a good stock.

When it goes down, you benefit. When it goes up, You benefit at the end of the day because you create an average. Now this is just the tip of the iceberg if you want to learn more about the system of how to invest in good companies over the Long Haul How to be a smart investor, How not to get into hype and Fomo and get rackpole How to pit the system Because don't forget our students are the ones who are buying the Dip of Palantir and now are seeing the 130 Spike that we've seen. That's how you do it.

Now the way to do it is to join my Patreon right now. On the screen on the right hand corner at the top, you can see it paid in.com Forward slash Tom Nash on my 4300 member Community Which you can sign up I Teach proper investing how to be a long-term investor, how to do it the right way I Teach you a system I Teach you discipline I teach you a process. none of this. Get rich, quick stuff.

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My goal isn't to be the next billionaire. Simple as that. If you're cynical, if you think that this is me, just you know, blowing smoke up your bum, it's fine. This is not for everyone.

but if you are digging what I'm saying here and and you're connecting with me, check out my Patreon and try it out for a week for two. see if you like it. I Think you owe it yourself to learn the system the right way. Now here's the crazy part.

Everything I just showed you here you can do for yourself whether it's for sofa or any other stock stock. Dash Mvp.com This is a platform I've created because I couldn't find anything like this I couldn't find a way to do a DCF model in a minute I Couldn't find anything to show me this quick card so I could see all the information about the company in a minute I've built this with my partner Pete my business partner Pete You can try it out for a week risk free. We give refunds again here as well. Same policy now.

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I'm not just saying this. trust me, this is literally your last chance Last 50. thank you so much I'll see you in the next video.