The SoFi Stock Alternative Nobody Talks About

If there's one fintech stock that I could like more than SoFi, it could definitely be this name. I'm buying it consistently. It does come with additional risk, but I think that that risk is well paid off with the potential reward, and that is New Bank. New Bank is a Latin American bank that covers Brazil, Mexico, Colombia, and we'll talk about some other additional geographies that they could be getting into. If you've never heard of this name, let me pitch it to you really quickly. First off, the reason why I'm talking about this is not because it's going up right now, but because it's going down. That's where the opportunity is for us as individual investors. Right now, this company is down 29% year to date, and I'm going to show you guys why that is so disconnected from reality. Now, I'm not jumping over to the new popular name or anything like this. I've been covering this company for over 3 years now, and I'm going to continue to do so as long as they show that continuous execution. But in fact, no one's talking about this name and it's not very popular. But this is a Latin American fullyfledged financial institution. If you know SoFi, you're going to understand New Bank because they have the checking accounts, they have the credit cards, the personal loans, the invest accounts, the crypto, all of those solutions along with midsize and small business banking and the entire range here for 135 million customers. A large percentage of that, what you can see in the purple here, is actually their Brazilian population. They serve over 61% of the entire adult population in Brazil. They also serve over 15 million members in Mexico. And they've also recently announced that they serve over 5 million customers in Colombia. Those customers are not just coming on the platform and using one solution with them. They are constantly increasing their activity rate on the platform, which is identified by New Bank as being a revenuecreating activity per month. And that's up to 83.4%. This is way above the average across any other fintech worldwide. Even as they've expanded their user base into a wider and wider audience, this activity rate has continued to climb and it's actually somewhere above 86% for Brazil. It's being lowered by the other areas that they're in like Mexico and Colombia where they don't have a wider range of products yet. Part of being a financial services company is collecting direct deposits. Those direct deposits on customers lead to more spending. If you have more spending on the platform, that's more payment revenue, but you need that deposit to go up as well, which is exactly what New Bank has shown out of the lifetime of this company being public. More deposits and more payments lead to more revenue, but that also leads to more customers taking out loans or starting to invest or creating other solutions, and they get deeper integrated within your full ecosystem. This even shows up in their lending now hitting all-time highs of $37 billion of consumer loans. It's like unbelievably high comparatively to the other companies that we show off. But the most important statistic is what this shows up for average revenue per user. Monthly average revenue per user now hitting another high almost month over month all the way up to $15.90. And these are US dollars by the way. Although they are actually using Brazilian real or Mexican pesos or these sort of other currencies, whenever they show it off to investors, it's all in GAP US dollars. Same thing with the revenue here. bringing up to3.7 billion dollars per quarter. This is a long way from where we were few years ago, only just breaking 1 billion and now we're almost 3 3.7 times that amount in just the last 3 years. Even at the total scale of the business that we're at, New Bank is still putting up growth rates of 57% year-over-year. This is much faster than the Sofi or even the Robin Hoods of the world right now or Chimes or all of the American FinTechs that we can compare this to. But it only matters if they're actually profitable. And New Bank is bringing in roughly $870 million US per quarter. That's a lot of money. And the margin continues to improve quarter after quarter after quarter. So quick recap on the overall business. They're getting more customers over time. Those customers are paying more for their business. The efficiency ratio is like one of the lowest efficiency ratios you can find of any bank in the entire world, which essentially means that they have a low cost to actually serve those customers. yet they're bringing on the highest amount of net income margins they've ever seen. This business is amazing. And I wanted to show off this slide really quickly specifically for this segment on the left that as customers stay on the platform, although the average is $15.90, the people who have been with them for multiple years pay on average $30.80 because they're using more and more of their services. So, as time goes on, just naturally without bringing on new customers, average revenue per user will continue to climb. The reason they're going to continue to stay with New Bank is because they love this product. NPS is net promoter score. It's essentially a satisfaction survey that's done across all of these different industries. And Newbank is above all of their competitors. In fact, Davidid Valz was on a podcast and he said this. Take a listen. Guess what is the highest net promoter score of any consumer product in the world today? This is going to be surprising to you. It's not the Tesla. It's not the iPhone. The best highest rated NPS consumer product in the world in any category is New Bank's Purple credit card in Mexico. It's a 94 NPS. It's strange that that's the case, but that just tells you to think. That tells you something about the market and the problem and tell you something about the solution and the strategy that we've chasing to build this consumer brand. >> It's unbelievable. The best highest NPS score in the world is a new bank purple credit card. This is like Davidid Vez said there a myriad of a bunch of different things. One, people's access to credit in Mexico is extremely tight. Incumbent banks do not like to actually give out credit to consumers that don't have credit history, and they are usually only serving the richest people in the country. But New Bank has found a solution where they can offer small amounts of credit to people with zero history and quickly turn them off if they choose to not pay that credit back. If they continue to pay that back, then they give them more and more credit limits very quickly and then start to build up that credit history with customers that have had no relationships with previous banks or financial institutions. And even though they have a relationship with 61% of the total adult population, they're only servicing roughly 7% of the overall gross profit margin that's made in financial services in Brazil. They are obviously breaking into the card market or unsecured loan markets pretty quickly. But in terms of all the other areas that they could get into, it's an extremely small profit pool of what they could potentially grow into going forward. And that's the same thing for Mexico, for which now they're starting to really invest into Mexico, and they've only broken into about less than 1% of the entire market. The interesting thing about Brazil and Mexico is that one has 212 million people there, while Mexico only has 131 million. But the GDP per capita is roughly 40% higher in Mexico. So although they have many less actual customers there, those customers can bring on a lot more payments, a lot more deposits, and actually do very well for New Bank overall. Colombia is a great addition as well. And now in 2026, New Bank got approved to go to the United States as a nationally chartered bank. They're not entering it as a fintech. they're going straight in along with actually starting an investment hub in Buenos Aeres, Argentina, which could potentially be another area that they start to invest in and actually allow people to open up credit cards and checking accounts. But take a look at this. Whenever you start looking at the United States, although the population is even bigger, about 140 million bigger than Brazil or 130 million, the GDP per capita is roughly 8.4 times larger. I mean, an insane bump up. So even if they tap into a small percentage of the overall US market for which there is a huge Hispanic population that is underserved or underbanked, this could be the biggest explosion in their overall business. They only need to enter into a small percentage of this to gain access to a massive market. And then on top of that, Argentina looks very similar to Mexico and even higher GDP per capita than Brazil. So these two areas could be massive expansion for their overall business. And according to newbank the digital challengers which is essentially the fintex the sois the Robin Hoods the new banks are going to continue to grow in total profit share of financial services in general and by 2030 they believe that they can go from about 20% to about 35% taking away from those large incumbent banks and giving more to the sois Robin Hoods and new banks of the world now all of these new markets require a ton of capital but that's exactly what new bank has increasing just over the last few their total amount of cash on their balance sheet from $9 billion up to $23 billion in cash, cash equivalents, and short-term investments. And the way that they're actually compensating their employees for all of this growth is actually very, very good. Only 4% stockbased compensation as a percentage of revenue even recently, and that's usually spiking on March. So, you can expect that to continue to go down and find even lower lows than where we were before. This is much lower than the Robin Hoods, the SOFIS, and all of these. meaning that management really does care about your capital and they want to try to make the best business possible. So, the overall outstanding shares of the company really hasn't changed. And in fact, although they haven't started buybacks, the outstanding shares have gone down quarter over quarter just because the vested shares of their overall options are not vesting. Meaning that they're actually lowering total share count without even having to buy back. But if they do buy back, which was just announced June 4th, they're going to start a buyback program, and that's almost going to assuredly go directly to share count and not to stock-based compensation like many of these tech companies are starting to do, like Robin Hood, for example. Much of the reasoning for why I'm investing is because of this man right here, Davidid Vez. He's not Brazilian. He doesn't speak Portuguese. He's not a banker. He's never worked in credit. And he wasn't an engineer. And he created the largest Brazilian bank that has ever been seen. and dominating in the credit industry. This man is a true entrepreneur. He's a problem solver and it doesn't matter which area they enter into whether it's United States or Argentina or whatever. The faith is in the person who is able to solve problems, not just an area expertise for which other bankers are in and trying to dominate that way. He's looking at the problems from a completely different angle. So, it's not a bank that's trying to incorporate technology. They're a technology company that's just happened to be in the financial services industry and dominating that way. And yet, this company is at all-time lows right now in terms of its valuation. 18 times trailing PE, 13 times forward PE for a company growing 57% and margin expansion is still happening. This is unbelievable. But ladies and gentlemen, it still means that there is risk, right? You have geopolitical risks. If something happens between the United States and Brazil, something that ends up happening in that way could hurt the company. There's a massive currency conversion risk between US dollars and Brazilian real. If the US dollar strengthens, this hurts the company. If the dollar weakens, this gives massive benefits to new bank whenever they have to show off their dollars that are done in Brazilian real. But then once they convert it over to US dollars for investor sake, well, obviously that's a massive improvement. But as they get into markets like the United States, that currency conversion risk goes way down because they'll just be making US dollars. But anyway, you guys let me know what you guys think down in the comments down below. But I love this company and I'm not worried about the overall selloff and in fact, I'm just here to buy more. Thank you all so much for watching. really do appreciate your time and bye for