$SoFi Technologies Inc.(SOFI)$ will be reporting fourth-quarter for 2024 on 27 Jan 2025 before the market opens. This upcoming earnings release would be great interest to investors, for myself as I have a long term position on SoFi.
The consensus estimate for revenue is projecting net sales of $664.04 million, up 11.74% from the year-ago period. Earnings per share is predicted to come in at $0.03 which indicating a 50% growth as compared to same period last year.
SoFi (SOFI) Last Earnings Call Sentiment Positive Lead To 57.82% Gain Since
Since the last earnings call on 29 Oct 2024, SOFI has managed to give investors a 57.82% change with the earnings call sentiment being positive.
The earnings call presented a strong performance for SoFi in Q3 2024, with record revenue and profitability. Significant growth was noted in financial services and tech platform segments.
However, challenges in loan originations and delays in tech platform decisions were mentioned. Overall, the highlights significantly outweigh the lowlights, indicating a positive sentiment.
SoFi (SOFI) Full Year 2024 Revenue Looks To Perform
During SoFi Technologies' Q3 2024 earnings call, the company reported a record adjusted net revenue of $689 million, marking a 30% year-over-year growth, with financial services contributing over one-third of total revenue at $238 million, up 102% from the previous year.
The tech platform segment also saw growth to nearly $103 million, a 14% increase. The company added 756,000 new members, reaching a total of 9.4 million, and grew products by over 1 million to 13.7 million, with a notable 52% increase in revenue per product to $81.
SoFi's lending segment achieved a record $6.3 billion in loan volume, and the company maintained a strong balance sheet with a total capital ratio of 16.3%. Looking forward, SoFi increased its full-year 2024 revenue guidance to a range of $2.535 billion to $2.550 billion, with adjusted EBITDA expected between $640 million and $645 million.
Positive Factors That Might Give SOFI Better Earnings
SoFi achieved record adjusted net revenue of $689 million in Q3 2024, a year-over-year growth of 30%. In Q3, financial Services segment revenue reached $238 million, up 102% year-over-year, making up more than 1/3 of total revenue.
The tech platform segment grew to nearly $103 million in net revenue, a 14% increase from the previous year. SoFi achieved its fourth consecutive quarter of GAAP profitability with GAAP net income of nearly $61 million, a $327 million improvement year-over-year.
In Q3 2024, SOFI added 756,000 new members, growing 35% year-over-year to a total of 9.4 million members. The loan platform business generated $56 million in fees, with $1 billion of personal loans originated on behalf of third parties.
This means that SOFI is doing a good job of acquiring users and deepening its relationship with said members. SOFI customer would be able to enjoy the different products offered, and hence SOFI can unlock as it gains and monetizes users in a virtuous loop.
Challenges That Might Hinder SOFI Earnings Growth
While personal loan originations reached a record $4.9 billion, the company sold $375 million of loans in whole loan form, a decrease compared to prior quarters.
Decisions on large tech platform deals have been delayed, impacting potential revenue growth.
These two challenges have affected SOFI Q3 earnings, and we hope to see a better execution from SOFI to overcome these challenges.
SoFi (SOFI) Price Target
Based on 15 Wall Street analysts offering 12 month price targets for SoFi Technologies in the last 3 months. The average price target is $13.19 with a high forecast of $19.00 and a low forecast of $5.00. The average price target represents a -25.14% change from the last price of $17.62.
SOFI has closed at $18.03 as of 23 Jan 2025 trading session, so with the history of beating EPS for the past three quarter, we could be seeing another EPS estimate beat, but how the market would respond to the earnings call would see share price movement in volatility.
Technical Analysis - Multi-timeframe (MTF)
If we were to take a look at the previous share price movement in SOFI, it has risen prior to its earnings, but start to decline after only a short period of upside due to positive earnings and guidance.
The worry of valuation is not over yet for SOFI, but I believe that as long as SOFI is still growing its business segments, it will eventually catch up.
If we looked at the current MACD, it is forming a nice upside movement, and SOFI is currently trading above the short-term and long-term MA, we are getting a strong upward trend from MTF as well.
Summary
I have a long term position on SOFI as I have confidence that SOFI would eventually be one of the leading fintech, because the customers are now looking for a one-stop service, SOFI business model manage to fit in well.
With referral and able to help customer who are onboard to connect to all their financial needs from verified service providers, it remove the hassle to evaluate, customer just need to compare the prices offered.
I would think SOFI need to overcome the personal loan growth and also the large tech platform deal, which has impact its Q3 earnings.
Appreciate if you could share your thoughts in the comment section whether you think SOFI would beat EPS estimate and provide a positive 2025 guidance.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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