Netflix, Taiwan Semiconductor, JPMorgan, United Airlines, and other giants helped the stock market get off to a flying start in Q4 earnings season.
Every Zacks sector is projected to post earnings growth in 2025, including huge double-digit expansion by many non-tech spaces.
See the Zacks Earnings Calendar to stay ahead of market-making news.
On top of that, every S&P 500 sector is projected to post EPS growth in 2025 for the first time since 2018.
Last week, investors celebrated a slightly cool inflation reading that increased the likelihood of multiple interest rate cuts this year.
This backdrop likely has investors looking for stocks to buy as Q4 earnings season heats up.
Today we dig into two cheap stocks trading for under $20—WisdomTree and SoFi—that investors might want to buy for long-term upside.
Buy This $10 Fintech Stock for at Least 30% Upside?
WisdomTree, Inc. WT is a diversified global financial company, specializing in ETFs and exchange-traded products. WT had $112.6 billion assets under management at the end of Q3, with $113.5 billion as of January 21. WisdomTree’s ETFs offerings range from U.S. Large Cap Dividend and U.S. Value funds to Cloud Computing, Artificial Intelligence, and beyond.
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WisdomTree’s portfolio helps investors gain exposure to various markets outside of the U.S., as well as Bitcoin and more. ETFs have become one of the most popular ways for investors of all stripes to invest. WisdomTree’s standing as the world’s largest independent ETF sponsor is a nice pitch to Wall Street, especially as low and no-cost investing applications democratize investing and finance in the U.S. and globally.
The company also has an institutional focused investing platform. On top of ETFs, the company’s consumer-focused WisdomTree Prime blockchain-based financial services app is an “easy-to-use way to spend, save, and invest.”
WT grew its revenue by 16% in 2023 and it is projected to boost sales by 23% in FY24 and 9% in FY25 to reach $467 million. Better yet, WisdomTree is expected to grow its adjusted earnings by 76% in FY24 and 14% in 2025, following over 40% expansion in FY23.
WisdomTree’s earnings revisions have remained unchanged recently and WT has topped our EPS estimate by an average of 10% in the past three quarters. WisdomTree’s operating income margin climbed by 4.7 points to 36.0% in Q3.
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WisdomTree stock has ripped 73% higher in the past two years to blow away the Finance sector’s 38% and the S&P 500’s 54%. Despite its 150% run in the last five years, WT trades roughly 60% below its 2015 peaks. WT trades 31% below its average Zacks price target and it recently found buyers at its 50-week moving average.
WisdomTree trades at a roughly 75% discount to its 10-year highs and 37% below its median at 13.1X forward 12-month earnings—WT trades at its lows over the last 10 years outside of Covid. And its dividend yields 1.2%.
Some investors might want to take a chance on the beaten-down financial tech stock heading into its Q4 earnings release on January 31.
Buy Cheap SoFi Technologies Stock for Long-Term Growth?
SoFi Technologies SOFI stock has skyrocketed 135% in the last six months. Even though SOFI has climbed 200% in the past two years it still trades over 25% below its 2021 records at roughly $18 per share. SoFi Technologies is a one-stop shop for consumer finances.
SoFi’s offerings include banking, personal loans, credit cards, investing, insurance, and beyond. SoFi remains firmly in its growth phase, growing its members by 35% YoY in Q3 to close with 9.4 million—SoFi has since reached 10 million members.
SoFi said at the end of 2024 that users have gravitated toward new offerings such as its robo-advisor platform, as well as “expanded access to alternative assets, early access to in-demand IPOs, unique investment opportunities (including interval funds, private credit, private real estate and private venture),” and more.
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SoFi reported its fourth consecutive quarter of GAAP net income in Q3. Financial Services and Tech Platform units accounted for 49% of Sofi’s net revenue vs. 39% in the year-ago period. “These businesses grew revenue by a combined 64% year-over-year, a testament of our continued execution and deliberate shift towards capital-light, higher ROE, fee based revenue streams,” SoFI CEO Anthony Noto said in prepared remarks.
SoFi is projected to grow its revenue by 22% in 2024 and 18% in 2025 to reach $2.97 billion—adding nearly $1 billion vs. 2023.
Wall Street will also love to see SoFi swing from an adjusted loss of -$0.36 a share in FY23 to +$0.12 a share in 2024 and then surge 144% higher in FY25 to $0.29 a share. SoFi’s upward earnings revisions help it land a Zacks Rank #1 (Strong Buy) and it beat by 25% last quarter.
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SoFi is trading above its 21-day and 50-day moving averages. The stock could face selling pressure before or after its earnings release on Monday, January 27 after its surge to 52-week highs.
SOFI is still pricey when it comes to forward earnings (58X). Yet, SoFi’s impressive long-term earnings growth outlook helps the stock trade at a 35% discount to Tech, with a 1.2 PEG ratio.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>SoFi Technologies, Inc. (SOFI) : Free Stock Analysis Report
WisdomTree, Inc. (WT) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
