SoFi Technologies and TransMedics experience surging shares amid strong growth prospects.
In a remarkable development for SoFi Technologies (NASDAQ:SOFI), the financial services company has not only witnessed a 60% surge in its shares this year but also stands as an enticing investment, as indicated by recent reports. The company has demonstrated an impressive year-over-year revenue growth of 142% and is poised to achieve GAAP profitability in the fourth quarter of 2023, with expectations of sustaining profitability throughout 2024.
SoFi’s growth can be attributed to its successful evolution into a comprehensive banking service provider since its establishment in 2022. A major contributor to this success is the financial services segment, generating over $118 million in revenue in the latest quarter. Furthermore, SoFi’s banking division has excelled in attracting deposits, adding $2.9 billion in Q3 alone, pushing the total deposit base to nearly $16 billion. Significantly, 90% of these deposits are direct, carrying an average interest rate of 4.12%. This strategic approach has afforded SoFi a cost advantage for its lending operations, with a significantly lower rate than the warehouse facility rate of 6.31%. Consequently, SoFi’s net interest margin has risen from 4.4% in Q1 2021 to the current 6%. The company’s membership has also grown, reaching 6.9 million, reflecting its expanding market presence.
Shares of TransMedics (NASDAQ:TMDX) have also experienced a notable 50% increase in value, with the company maintaining its status as a promising investment opportunity. This positivity is underpinned by TransMedics’ recent revenue surge of 159%. The innovative Organ Care System (OCS) has played a pivotal role, extending the viability timeline for donated organs up to thirty hours and achieving an impressive lung utilization rate of 87%.
TransMedics’ strategic integration of its Summit Aviation acquisition and fleet of planes has proven successful, contributing to significant sales growth in the recent quarter. With plans to establish a coast-to-coast logistical network, TransMedics aims to further boost organ utilization rates and streamline the organ transport process. Despite accounting for one-time acquisition costs, the company reported a healthy net profit margin of 6% in Q3 and has set an ambitious goal to expand from facilitating 2,000 transplants on its National OCS Program (NOP) in 2023 to 10,000 by 2028.
Despite the substantial increase in SoFi’s stock price this year, it remains attractively priced with a price-to-sales ratio of just 3.5, considerably lower than its historical average as a publicly traded entity. This indicates that both SoFi Technologies and TransMedics are not only experiencing robust growth but also present promising investment opportunities based on their current performance and future potential.
