Yuannie
2021-09-30
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SoFi: Why Did I Back Up The Truck?<blockquote>索菲：我为什么要倒车？</blockquote>
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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":865962076,"tweetId":"865962076","gmtCreate":1632931538740,"gmtModify":1632931538945,"author":{"id":3581971370837763,"idStr":"3581971370837763","authorId":3581971370837763,"authorIdStr":"3581971370837763","name":"Yuannie","avatar":"https://static.tigerbbs.com/b80c447bbb749afb1e2e06b5ce30531b","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":12,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":10,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p>Nice 🚀</p></body></html>","htmlText":"<html><head></head><body><p>Nice 🚀</p></body></html>","text":"Nice 🚀","highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/865962076","repostId":1154344472,"repostType":4,"repost":{"id":"1154344472","kind":"news","pubTimestamp":1632928025,"share":"https://www.laohu8.com/m/news/1154344472?lang=zh_CN&edition=full","pubTime":"2021-09-29 23:07","market":"us","language":"en","title":"SoFi: Why Did I Back Up The Truck?<blockquote>索菲：我为什么要倒车？</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1154344472","media":"Seeking Alpha","summary":"Summary\n\nSoFi is one of my largest equity positions.\nThis is supported by a bullish thesis stipulati","content":"<p><b>Summary</b></p><p><blockquote><b>总结</b></blockquote></p><p> <ul> <li>SoFi is one of my largest equity positions.</li> <li>This is supported by a bullish thesis stipulating a 4-year revenue CAGR of 42% and FCF margins of 17%.</li> <li>While ambitious, it's likely to be attainable on the back of SoFi's core strategy.</li> </ul> <p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ebf97a4bfc29e8284c8da999fa6d92ac\" tg-width=\"1536\" tg-height=\"1025\" width=\"100%\" height=\"auto\"><span>PM Images/DigitalVision via Getty Images</span></p><p><blockquote><ul><li>SoFi是我最大的股票头寸之一。</li><li>这得到了看涨论点的支持，该论点规定4年收入复合年增长率为42%，自由现金流利润率为17%。</li><li>虽然雄心勃勃，但在SoFi核心战略的支持下，这很可能是可以实现的。</li></ul><p class=\"t-img-caption\"><span>PM Images/DigitalVision来自Getty Images</span></p></blockquote></p><p> My long thesis on SoFi (SOFI) is built on the digitization of traditional banking and financial services across America and the broader developed world. By creating an integrated platform offering multiple financial products with strong synergies across each one, SoFi is able to tap into multiple total addressable markets. The SoFi strategy is to build a membership experience and a full suite of products that leverages the financial services productivity loop. This is where it builds trust and a relationship in the first product to drive success in the next. This should see the company realize a higher customer lifetime value against lower customer acquisitions costs. It forms a competitive advantage against single product competition and creates the conditions for profits and free cash flow generation.</p><p><blockquote>我关于SoFi(SOFI)的长篇论文建立在美国和更广泛的发达国家传统银行和金融服务的数字化基础上。通过创建一个提供多种金融产品的集成平台，每种产品之间具有强大的协同效应，SoFi能够进入多个潜在市场。SoFi战略是建立会员体验和利用金融服务生产力循环的全套产品。这是它在第一个产品中建立信任和关系以推动下一个产品成功的地方。这将使公司在降低客户获取成本的同时实现更高的客户终身价值。形成了对抗单一产品竞争的竞争优势，为利润和自由现金流的产生创造了条件。</blockquote></p><p> The financial rationale underpinning this thesis is a revenue compound annual growth rate of at least 42% through to fiscal 2025 with adjusted EBITDA margins at 45%. This should see an average quarterly revenue of at least $1 billion from fiscal 2025.</p><p><blockquote>支撑这一论点的财务理由是，到2025财年，收入复合年增长率至少为42%，调整后的EBITDA利润率为45%。从2025财年开始，平均季度收入至少为10亿美元。</blockquote></p><p> <p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/383c2ac508db6c9e1131e95639cfc84f\" tg-width=\"640\" tg-height=\"289\" width=\"100%\" height=\"auto\"><span>SoFi Adjusted Net Revenue And Adjusted EBITDA Guidance</span></p><p><blockquote><p class=\"t-img-caption\"><span>SoFi调整后净收入和调整后EBITDA指引</span></p></blockquote></p><p> While my expected adjusted revenue growth rate comes in higher than SoFi's guidance by $331 million, the adjusted EBITDA should at minimum mirror provided guidance. SoFi's strategy should then see a material portion of this revenue converted into free cash flow. As at the end of its last reported quarter, for every $1 in revenue created, the company was able to convert 12.5 cents into free cash flow. This saw FCF, which is cash from operations minus capital expenditures, come in at $55.80 million for the 6 months ending June 30, 2021.</p><p><blockquote>虽然我预期的调整后收入增长率比SoFi的指导高出3.31亿美元，但调整后的EBITDA至少应该反映提供的指导。SoFi的战略应该会将这笔收入的很大一部分转化为自由现金流。截至上一季度末，公司每创造1美元的收入，就能将12.5美分转化为自由现金流。截至2021年6月30日的6个月内，FCF（即运营现金减去资本支出）为5580万美元。</blockquote></p><p> <b>The Winner Takes Most</b></p><p><blockquote><b>获胜者获得最多</b></blockquote></p><p> Cash is king. This is one of the most universal statements in business due to its importance in ascertaining the overall fiscal health of a company. Hence, with SoFi currently holding cash and equivalents of $462 million, the company's expected generation of free cash flow in the years coming places it in a healthy financial position. Further, the potential granting of a new banking charter, the increased operational scale of its strategy, the trajectory of its new financial services, and the retrenchment of pandemic era constraints on its business should see the company rise to realize incremental improvements to its FCF conversion rate. My bullish thesis states that this has a capacity to rise to at least 17 cents on the dollar or a free cash flow margin of 17%.</p><p><blockquote>现金为王。这是商业中最普遍的陈述之一，因为它对于确定公司的整体财务健康状况非常重要。因此，SoFi目前持有现金及等价物4.62亿美元，该公司预计未来几年产生的自由现金流使其处于健康的财务状况。此外，新银行牌照的潜在授予、其战略运营规模的扩大、新金融服务的发展轨迹以及大流行时代对其业务限制的缩减应该会使该公司实现其自由现金流转换率的增量改善。我的看涨论点指出，这有能力升至至少17美分或17%的自由现金流利润率。</blockquote></p><p> This should likely see free cash flow come in at just under $700 million generated on revenue of $4 billion in fiscal 2025. This leaves the only remaining equation to be what multiple on FCF the market will extend to SoFi at this point in the future. Square (SQ) currently trades on a 74x multiple to its cash flows, hence a 40x multiple to FCF could be stated as somewhat prudent, albeit not entirely conservative. This should see the total market capitalization of the company at roughly $28 billion, a 100% increase from its current $14 billion market cap. Annualized returns at 25% from fiscal 2022 would be far in excess of historical returns from the broader market.</p><p><blockquote>2025财年，自由现金流可能会接近7亿美元，收入为40亿美元。这使得唯一剩下的等式是未来此时市场将扩展到SoFi的FCF倍数。Square(SQ)目前的市盈率是其现金流的74倍，因此自由现金流的40倍可以说是有些谨慎的，尽管并不完全保守。这将使该公司的总市值约为280亿美元，比目前140亿美元的市值增长100%。2022财年25%的年化回报率将远远超过大盘的历史回报率。</blockquote></p><p> Of course, the actual end market capitalization could be a widely different figure as it will be dictated by a number of factors that are hard to forecast so far ahead. Firstly, the bank charter is not guaranteed, and a delay beyond this timeline would see actual free cash flow generated come in materially lower. Further, with the pandemic still raging, further interventions by the federal government in SoFi's core lending market cannot be entirely ruled out. Another risk also arises from competition from other established fintech firms looking to mimic SoFi's integrated financial platform strategy as it would create mirror offerings.</p><p><blockquote>当然，实际的最终市值可能是一个截然不同的数字，因为它将由许多难以预测的因素决定。首先，银行执照没有保证，超过这个时间表的延迟将导致实际产生的自由现金流大幅下降。此外，由于疫情仍在肆虐，不能完全排除联邦政府对SoFi核心贷款市场的进一步干预。另一个风险还来自其他老牌金融科技公司的竞争，这些公司希望模仿SoFi的综合金融平台战略，因为它将创建镜像产品。</blockquote></p><p> <b>A Blueprint For Growth</b></p><p><blockquote><b>增长蓝图</b></blockquote></p><p> SoFi is scratching the surface of the total American TAM for digital financial services. Hence, the company is likely in the very early innings of its growth. The digitization of finance from the proliferation of new generation fintech firms is transferring value away from the traditional banking incumbents.</p><p><blockquote>SoFi只是触及了美国数字金融服务总TAM的表面。因此，该公司可能正处于增长的早期阶段。新一代金融科技公司的激增带来的金融数字化正在将价值从传统银行业转移出去。</blockquote></p><p></p><p> I backed up the truck on SoFi because the company has a clear strategy for value creation being driven by a high-quality management team. The continued positive trajectory of multi-product membership growth is a strong vote of confidence in the ability of the company's strategy to boost LTV and reduce CAC. This should highlight itself in SoFi's financials as a boost to FCF in the years ahead.</p><p><blockquote>我在SoFi上备份了卡车，因为该公司有一个由高质量管理团队推动的明确的价值创造战略。多产品会员增长的持续积极轨迹是对公司提高LTV和降低CAC的战略能力的强烈信任票。这应该会在SoFi的财务状况中凸显出来，从而提振未来几年的自由现金流。</blockquote></p><p> Investing takes a lot of conviction and is an incredibly solitary experience where your mind becomes the only foundation to lean on when making investment decisions. These decisions should not be taken lightly as they spell the difference between wealth creation or destruction. I have taken a large position in SoFi as I believe it represents the type of company to generate returns in excess of the broader market.</p><p><blockquote>投资需要很大的信念，是一种极其孤独的经历，在这种经历中，你的思想成为做出投资决策时唯一可以依靠的基础。这些决定不应该轻易做出，因为它们决定了财富的创造或毁灭。我在SoFi持有大量头寸，因为我相信它代表了那种能够产生超过大盘回报的公司。</blockquote></p><p></p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>SoFi: Why Did I Back Up The Truck?<blockquote>索菲：我为什么要倒车？</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSoFi: Why Did I Back Up The Truck?<blockquote>索菲：我为什么要倒车？</blockquote>\n</h2>\n<h4 class=\"meta\">\n<p class=\"head\">\n<strong class=\"h-name small\">Seeking Alpha</strong><span class=\"h-time small\">2021-09-29 23:07</span>\n</p>\n</h4>\n</header>\n<article>\n<p><b>Summary</b></p><p><blockquote><b>总结</b></blockquote></p><p> <ul> <li>SoFi is one of my largest equity positions.</li> <li>This is supported by a bullish thesis stipulating a 4-year revenue CAGR of 42% and FCF margins of 17%.</li> <li>While ambitious, it's likely to be attainable on the back of SoFi's core strategy.</li> </ul> <p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ebf97a4bfc29e8284c8da999fa6d92ac\" tg-width=\"1536\" tg-height=\"1025\" width=\"100%\" height=\"auto\"><span>PM Images/DigitalVision via Getty Images</span></p><p><blockquote><ul><li>SoFi是我最大的股票头寸之一。</li><li>这得到了看涨论点的支持，该论点规定4年收入复合年增长率为42%，自由现金流利润率为17%。</li><li>虽然雄心勃勃，但在SoFi核心战略的支持下，这很可能是可以实现的。</li></ul><p class=\"t-img-caption\"><span>PM Images/DigitalVision来自Getty Images</span></p></blockquote></p><p> My long thesis on SoFi (SOFI) is built on the digitization of traditional banking and financial services across America and the broader developed world. By creating an integrated platform offering multiple financial products with strong synergies across each one, SoFi is able to tap into multiple total addressable markets. The SoFi strategy is to build a membership experience and a full suite of products that leverages the financial services productivity loop. This is where it builds trust and a relationship in the first product to drive success in the next. This should see the company realize a higher customer lifetime value against lower customer acquisitions costs. It forms a competitive advantage against single product competition and creates the conditions for profits and free cash flow generation.</p><p><blockquote>我关于SoFi(SOFI)的长篇论文建立在美国和更广泛的发达国家传统银行和金融服务的数字化基础上。通过创建一个提供多种金融产品的集成平台，每种产品之间具有强大的协同效应，SoFi能够进入多个潜在市场。SoFi战略是建立会员体验和利用金融服务生产力循环的全套产品。这是它在第一个产品中建立信任和关系以推动下一个产品成功的地方。这将使公司在降低客户获取成本的同时实现更高的客户终身价值。形成了对抗单一产品竞争的竞争优势，为利润和自由现金流的产生创造了条件。</blockquote></p><p> The financial rationale underpinning this thesis is a revenue compound annual growth rate of at least 42% through to fiscal 2025 with adjusted EBITDA margins at 45%. This should see an average quarterly revenue of at least $1 billion from fiscal 2025.</p><p><blockquote>支撑这一论点的财务理由是，到2025财年，收入复合年增长率至少为42%，调整后的EBITDA利润率为45%。从2025财年开始，平均季度收入至少为10亿美元。</blockquote></p><p> <p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/383c2ac508db6c9e1131e95639cfc84f\" tg-width=\"640\" tg-height=\"289\" width=\"100%\" height=\"auto\"><span>SoFi Adjusted Net Revenue And Adjusted EBITDA Guidance</span></p><p><blockquote><p class=\"t-img-caption\"><span>SoFi调整后净收入和调整后EBITDA指引</span></p></blockquote></p><p> While my expected adjusted revenue growth rate comes in higher than SoFi's guidance by $331 million, the adjusted EBITDA should at minimum mirror provided guidance. SoFi's strategy should then see a material portion of this revenue converted into free cash flow. As at the end of its last reported quarter, for every $1 in revenue created, the company was able to convert 12.5 cents into free cash flow. This saw FCF, which is cash from operations minus capital expenditures, come in at $55.80 million for the 6 months ending June 30, 2021.</p><p><blockquote>虽然我预期的调整后收入增长率比SoFi的指导高出3.31亿美元，但调整后的EBITDA至少应该反映提供的指导。SoFi的战略应该会将这笔收入的很大一部分转化为自由现金流。截至上一季度末，公司每创造1美元的收入，就能将12.5美分转化为自由现金流。截至2021年6月30日的6个月内，FCF（即运营现金减去资本支出）为5580万美元。</blockquote></p><p> <b>The Winner Takes Most</b></p><p><blockquote><b>获胜者获得最多</b></blockquote></p><p> Cash is king. This is one of the most universal statements in business due to its importance in ascertaining the overall fiscal health of a company. Hence, with SoFi currently holding cash and equivalents of $462 million, the company's expected generation of free cash flow in the years coming places it in a healthy financial position. Further, the potential granting of a new banking charter, the increased operational scale of its strategy, the trajectory of its new financial services, and the retrenchment of pandemic era constraints on its business should see the company rise to realize incremental improvements to its FCF conversion rate. My bullish thesis states that this has a capacity to rise to at least 17 cents on the dollar or a free cash flow margin of 17%.</p><p><blockquote>现金为王。这是商业中最普遍的陈述之一，因为它对于确定公司的整体财务健康状况非常重要。因此，SoFi目前持有现金及等价物4.62亿美元，该公司预计未来几年产生的自由现金流使其处于健康的财务状况。此外，新银行牌照的潜在授予、其战略运营规模的扩大、新金融服务的发展轨迹以及大流行时代对其业务限制的缩减应该会使该公司实现其自由现金流转换率的增量改善。我的看涨论点指出，这有能力升至至少17美分或17%的自由现金流利润率。</blockquote></p><p> This should likely see free cash flow come in at just under $700 million generated on revenue of $4 billion in fiscal 2025. This leaves the only remaining equation to be what multiple on FCF the market will extend to SoFi at this point in the future. Square (SQ) currently trades on a 74x multiple to its cash flows, hence a 40x multiple to FCF could be stated as somewhat prudent, albeit not entirely conservative. This should see the total market capitalization of the company at roughly $28 billion, a 100% increase from its current $14 billion market cap. Annualized returns at 25% from fiscal 2022 would be far in excess of historical returns from the broader market.</p><p><blockquote>2025财年，自由现金流可能会接近7亿美元，收入为40亿美元。这使得唯一剩下的等式是未来此时市场将扩展到SoFi的FCF倍数。Square(SQ)目前的市盈率是其现金流的74倍，因此自由现金流的40倍可以说是有些谨慎的，尽管并不完全保守。这将使该公司的总市值约为280亿美元，比目前140亿美元的市值增长100%。2022财年25%的年化回报率将远远超过大盘的历史回报率。</blockquote></p><p> Of course, the actual end market capitalization could be a widely different figure as it will be dictated by a number of factors that are hard to forecast so far ahead. Firstly, the bank charter is not guaranteed, and a delay beyond this timeline would see actual free cash flow generated come in materially lower. Further, with the pandemic still raging, further interventions by the federal government in SoFi's core lending market cannot be entirely ruled out. Another risk also arises from competition from other established fintech firms looking to mimic SoFi's integrated financial platform strategy as it would create mirror offerings.</p><p><blockquote>当然，实际的最终市值可能是一个截然不同的数字，因为它将由许多难以预测的因素决定。首先，银行执照没有保证，超过这个时间表的延迟将导致实际产生的自由现金流大幅下降。此外，由于疫情仍在肆虐，不能完全排除联邦政府对SoFi核心贷款市场的进一步干预。另一个风险还来自其他老牌金融科技公司的竞争，这些公司希望模仿SoFi的综合金融平台战略，因为它将创建镜像产品。</blockquote></p><p> <b>A Blueprint For Growth</b></p><p><blockquote><b>增长蓝图</b></blockquote></p><p> SoFi is scratching the surface of the total American TAM for digital financial services. Hence, the company is likely in the very early innings of its growth. The digitization of finance from the proliferation of new generation fintech firms is transferring value away from the traditional banking incumbents.</p><p><blockquote>SoFi只是触及了美国数字金融服务总TAM的表面。因此，该公司可能正处于增长的早期阶段。新一代金融科技公司的激增带来的金融数字化正在将价值从传统银行业转移出去。</blockquote></p><p></p><p> I backed up the truck on SoFi because the company has a clear strategy for value creation being driven by a high-quality management team. The continued positive trajectory of multi-product membership growth is a strong vote of confidence in the ability of the company's strategy to boost LTV and reduce CAC. This should highlight itself in SoFi's financials as a boost to FCF in the years ahead.</p><p><blockquote>我在SoFi上备份了卡车，因为该公司有一个由高质量管理团队推动的明确的价值创造战略。多产品会员增长的持续积极轨迹是对公司提高LTV和降低CAC的战略能力的强烈信任票。这应该会在SoFi的财务状况中凸显出来，从而提振未来几年的自由现金流。</blockquote></p><p> Investing takes a lot of conviction and is an incredibly solitary experience where your mind becomes the only foundation to lean on when making investment decisions. These decisions should not be taken lightly as they spell the difference between wealth creation or destruction. I have taken a large position in SoFi as I believe it represents the type of company to generate returns in excess of the broader market.</p><p><blockquote>投资需要很大的信念，是一种极其孤独的经历，在这种经历中，你的思想成为做出投资决策时唯一可以依靠的基础。这些决定不应该轻易做出，因为它们决定了财富的创造或毁灭。我在SoFi持有大量头寸，因为我相信它代表了那种能够产生超过大盘回报的公司。</blockquote></p><p></p>\n<div class=\"bt-text\">\n\n\n<p> 来源：<a href=\"https://seekingalpha.com/article/4457663-sofi-why-did-i-back-up-the-truck\">Seeking Alpha</a></p>\n<p>为提升您的阅读体验，我们对本页面进行了排版优化</p>\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SOFI":"SoFi Technologies Inc."},"source_url":"https://seekingalpha.com/article/4457663-sofi-why-did-i-back-up-the-truck","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1154344472","content_text":"Summary\n\nSoFi is one of my largest equity positions.\nThis is supported by a bullish thesis stipulating a 4-year revenue CAGR of 42% and FCF margins of 17%.\nWhile ambitious, it's likely to be attainable on the back of SoFi's core strategy.\n\nPM Images/DigitalVision via Getty Images\nMy long thesis on SoFi (SOFI) is built on the digitization of traditional banking and financial services across America and the broader developed world. By creating an integrated platform offering multiple financial products with strong synergies across each one, SoFi is able to tap into multiple total addressable markets. The SoFi strategy is to build a membership experience and a full suite of products that leverages the financial services productivity loop. This is where it builds trust and a relationship in the first product to drive success in the next. This should see the company realize a higher customer lifetime value against lower customer acquisitions costs. It forms a competitive advantage against single product competition and creates the conditions for profits and free cash flow generation.\nThe financial rationale underpinning this thesis is a revenue compound annual growth rate of at least 42% through to fiscal 2025 with adjusted EBITDA margins at 45%. This should see an average quarterly revenue of at least $1 billion from fiscal 2025.\nSoFi Adjusted Net Revenue And Adjusted EBITDA Guidance\nWhile my expected adjusted revenue growth rate comes in higher than SoFi's guidance by $331 million, the adjusted EBITDA should at minimum mirror provided guidance. SoFi's strategy should then see a material portion of this revenue converted into free cash flow. As at the end of its last reported quarter, for every $1 in revenue created, the company was able to convert 12.5 cents into free cash flow. This saw FCF, which is cash from operations minus capital expenditures, come in at $55.80 million for the 6 months ending June 30, 2021.\nThe Winner Takes Most\nCash is king. This is one of the most universal statements in business due to its importance in ascertaining the overall fiscal health of a company. Hence, with SoFi currently holding cash and equivalents of $462 million, the company's expected generation of free cash flow in the years coming places it in a healthy financial position. Further, the potential granting of a new banking charter, the increased operational scale of its strategy, the trajectory of its new financial services, and the retrenchment of pandemic era constraints on its business should see the company rise to realize incremental improvements to its FCF conversion rate. My bullish thesis states that this has a capacity to rise to at least 17 cents on the dollar or a free cash flow margin of 17%.\nThis should likely see free cash flow come in at just under $700 million generated on revenue of $4 billion in fiscal 2025. This leaves the only remaining equation to be what multiple on FCF the market will extend to SoFi at this point in the future. Square (SQ) currently trades on a 74x multiple to its cash flows, hence a 40x multiple to FCF could be stated as somewhat prudent, albeit not entirely conservative. This should see the total market capitalization of the company at roughly $28 billion, a 100% increase from its current $14 billion market cap. Annualized returns at 25% from fiscal 2022 would be far in excess of historical returns from the broader market.\nOf course, the actual end market capitalization could be a widely different figure as it will be dictated by a number of factors that are hard to forecast so far ahead. Firstly, the bank charter is not guaranteed, and a delay beyond this timeline would see actual free cash flow generated come in materially lower. Further, with the pandemic still raging, further interventions by the federal government in SoFi's core lending market cannot be entirely ruled out. Another risk also arises from competition from other established fintech firms looking to mimic SoFi's integrated financial platform strategy as it would create mirror offerings.\nA Blueprint For Growth\nSoFi is scratching the surface of the total American TAM for digital financial services. Hence, the company is likely in the very early innings of its growth. The digitization of finance from the proliferation of new generation fintech firms is transferring value away from the traditional banking incumbents.\nI backed up the truck on SoFi because the company has a clear strategy for value creation being driven by a high-quality management team. The continued positive trajectory of multi-product membership growth is a strong vote of confidence in the ability of the company's strategy to boost LTV and reduce CAC. This should highlight itself in SoFi's financials as a boost to FCF in the years ahead.\nInvesting takes a lot of conviction and is an incredibly solitary experience where your mind becomes the only foundation to lean on when making investment decisions. These decisions should not be taken lightly as they spell the difference between wealth creation or destruction. I have taken a large position in SoFi as I believe it represents the type of company to generate returns in excess of the broader market.","news_type":1,"symbols_score_info":{"SOFI":0.9}},"isVote":1,"tweetType":1,"viewCount":683,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":6,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/865962076"}
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