SoFi Technologies (SOFI 3.14%) is doing well, recently hitting $10 per share, its highest since early 2022. However, it’s still down about 60% from its all-time high in 2021. SoFi is a digital bank but differs from traditional banks.

SoFi may be an industry disruptor, combining banking services with innovative technology.

Here are five reasons to consider investing in SoFi Technologies:

1. Popular with consumers

SoFi operates as a digital bank, offering loans and financial products through its app and website, with no physical branches. Since 2020, its customer base has grown from 1.4 million to nearly 8.8 million, marking a 41% increase year-over-year in Q2 2023. SoFi is especially popular with young, high-earning adults, a crucial demographic for future economic growth.

2. Beyond banking

SoFi isn’t just a bank; it operates with technology at its core. In 2020, it acquired Galileo, a fintech company that provides payment services to over 100 partners globally. Galileo’s contribution to SoFi’s overall profits has increased by 24% last year and continues to grow, potentially boosting SoFi’s overall growth.

3. Student loan potential

SoFi began as a student loan provider but faced challenges due to a federal loan freeze and rising interest rates, resulting in declining loan origination. However, as the freeze ends and private loan demand potentially grows 10% annually, SoFi’s student loan business could rebound significantly.

4. Focus on fee-based revenue

SoFi’s business model may evolve away from traditional banking by reducing its balance sheet risk. A recent $2 billion agreement with Fortress Investment Group allows SoFi to underwrite personal loans while offloading them, emphasizing a shift toward fee-based revenue rather than relying on interest income.

5. Expected earnings growth

SoFi has reported profits for three consecutive quarters and is positioned for significant earnings growth. Analysts predict an average annual growth rate of 51% over the next 3-5 years. With its popularity and market opportunities, SoFi appears set for strong performance, making it a good investment choice.