Is SoFi A Buy Ahead of Earnings?

🌟🌟🌟SoFi $SoFi Technologies Inc.(SOFI)$  is set to announce its Q4 24 earnings on January 27.  SoFi's share price has been on a tear as it is up 9.4% in the past 5 days and has skyrocketed 134% in 2024.

SoFI is a member centric, one stop shop for digital financial services on a mission to help its members  achieve financial independence through its full suite of financial products and services.   SoFi's members have been growing achieving almost 9.4 million in numbers year  todate.  With just 1 app, SoFi members are able to borrow, save, spend, invest and protect their money better, giving them fast access to the tools they need to achieve their goals.

SoFI innovates across 3 business segments.  They are Lending and Financial Services, Technology Platform and SoFi Bank.  

Under Lending and Financial Services, SoFi offers SoFi Checking and Savings, SoFi Invest, SoFi Credit Card, SoFi Protect and SoFi Insights.

SoFI Technology Platform offers end to end vertically integrated financial technology stack.

SoFI Bank NA which  is an affiliate of SoFi, is a nationally chartered bank regulated by the OCC, the FDIC and the Federal Reserve.

In Q3 24 SoFi reported a number of key financial achievements.  These include Total GAAP net revenue of USD 697.1 million which increased by 30% from the previous year quarter of USD 537.2 million.  3rd quarter EBITDA was USD 186.2 million, a 27% EBITDA margin.  This is a 90% increase from the same prior year period of USD 98 million.  All 3 segments achieved record contribution profit in the quarter.

SoFI also reported its 4th consecutive quarter of GAAP net income, achieving USD 60.7 million in Q3 24.  Diluted earnings per share was USD 0.05.

Net interest income for Q3 24 was USD 431.0 million, up 25% year over year.  This was driven by a 35% increase in average interest earning assets which was slightly offset by a 44 basis points decrease in average yields year over year. 

New member additions were over 756,000 in Q3 24 and total members reached almost 9.4 million, up 35% from 7 million in the same prior year period. 

Product additions were nearly 1. 1 million in Q3 24 and total products were nearly 13.7 million, up 31% from 10.4 million at the same prior year period. 

SoFI CEO Anthony Noto said that Q3 24 quarter was the strongest in SoFi's history.  SoFi's results reflect how SoFi is able to consistently achieve durable growth through innovation and brand building. 

SoFI 's Financial Services and Tech Platform segments now make up a record 49% of SoFi' s adjusted revenue, up from 39% a year ago. 

In Q3 24 SoFi Money reached record highs in Accounts, Total Deposits and Direct Deposit members.  Total Deposits grew to USD 24.4 billion with over 90% of SoFi Money deposits coming from direct  deposit members. 

SoFI Invest continues to see strong engagement, driven by new alternative assets, money market finds and mutual funds which were rolled out over the past year.  Currently 70% of new sign ups are from existing SoFi members. 

SoFi Credit Card officially launched the Everyday Cash Rewards and Essential credit cards, enabling SoFi to serve more people's spending and borrowing needs. 

Loan Platform Business has evolved into an integrated loan platform experience which now offers just in time lending.  The Loan Platform Business posted record results, driven by a record USD 1 billion of personal loan volume generated on behalf of 3rd parties in the quarter. 

Tech Platform signed several new partnerships, launched advance fraud protection solutions and a new Secured Credit with Dynamic Funding offering to promote greater financial inclusion and help customers build stronger credit. 

Home Loans saw its best refinancing quarter since Q2 22.  Home purchase and refinancing grew 23% while home equity loan volume grew 44% from the prior year period. 

Credit performance continues to improve with personal loan delinquencies and net charge offs decreasing on a percentage and absolute basis in the quarter.  90 Days personal loan delinquency rate decreased to 57 basis points from 64 basis points in the prior quarter.  Personal loan annualised charge off rate decreased to 3.52% from 3.84% in the prior quarter. 

SoFi ended the quarter with its highest average unaided brand awareness of all time, up 40% year over year as it pursues its vision to become a Top ten financial institution. 

Citibank Analyst has raised SoFi price target to USD 18.00 from USD 12.50 due to its solid Q3 results,   strong execution and SoFi's plan to shift towards fee based revenue streams.  Wall Street Analysts expect SoFi to report earnings per share of USD 0.04, up from USD 0.02 per share in the same quarter last year. 

Is SoFi a Buy Ahead of its Q4 24 earnings report? 

According to Analysts, SoFi presents an attractive investment opportunity ahead of its Q4 24 earnings report due to its projected 133.3% year over year earnings growth and a 22.3% revenue increase.  SoFi's robust performance reflects strong segmental growth in the Financial Services and Technology Platforms. 

I have invested in SoFi just 5 months ago in 2024 as I could see its huge growth potential and its continued innovation with its products and services.   I am very impressed with SoFi's performance todate.  SoFi is possibly the fastest growing stock that I own todate. 

Moreover under the new Trump administration, Fintechs like SoFi may likely find a more supportive regulatory environment which could include easing of supervision, capital and liquidity requirements and digital assets.  This could herald the Golden Age of US financial sector. 

I am so excited about SoFi and believe that it is on the cusp of more exponential growth ahead. 

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