To The Moon

For the week ending 21 Mar 2025, $SoFi Technologies Inc.(SOFI)$ were up almost +5%, despite falling fractionally on Thu, 20 Mar 2025.

As of end Fri, 28 Mar 2025:

• Its one-month performance, is still down by −18.11%.

• Year-to-date, it is down by -16.14%.

• For trailing 12 months, it is up by +64.13%.

Latest Development.

On 13 Mar 2025, SoFi finalized an agreement of up to $5 billion with funds managed by asset manager Blue Owl Capital to provide personal loans on its finance app,

This 2-year deal with Blue Owl is SoFi's biggest loan deal so far, showing more demand for personal loans via online lenders instead of banks.

Like its October 2024’s $2.1 billion loan platform agreement for personal loans with funds managed by affiliates of Fortress Investment Group, SoFi will connect pre-qualified borrowers who want loans to lenders, making borrowing easier.

For that, its 2024 full year’s fee-based revenue surged +74% to $969.9 million, driven by strong performance across origination fees, loan platform business as well as interchange, brokerage and referrals - thanks to its growing membership. (see above)

Analysts’ reassessment.

With its latest quarterly earnings, analysts have revised their price target:

• Morgan Stanley(MS)$ raised SoFi’s price target to $13 from $7.50, citing it being “Underweight”.

• Needham Investment Mgmt raised its price target to $20 from $13, with a “Buy” rating.

• William Blair Investment Mgmt has initiated coverage of SoFi with a “Buy” rating just this January.

Other Key Points: 

• SoFi Technologies is a premier online financial solutions platform targeting a more affluent demographic.

• Its ambition to become a one-stop shop for financial services and its growing deposit base will likely drive future growth.

• 24/7 Wall St. projects a +40.6% upside on the stock through the end of the decade.

History in Brief.

• SoFi was originally known as Social Finance, specializing in student loan financing before expanding into loans, and mortgage products among other finance products.

• Like other companies eg. Prella Weinberg Partners(PWP)$, MP Materials(MP)$ it got listed via merger with SPAC company Social Capital Hedsophia Holding Corp. V on 01 Jun 2021.

• Its strategic acquisition of Galileo in 2020, helped SoFi to deploy a wide range of financial services quickly, giving SoFi the tools to take numerous financial products to a mass market.

• Like all SPACs’ merger companies, SoFi went public at $10 per share and soared +150%, at its peak.

• US’s SPACs-fever peaked in 2021, with 613 SPAC IPOs raising a record $163 billion, accounting for 59% of all US IPOs that year.

• When SPAC-fever petered by 2022, so did SoFi stock price.

• Despite the setback, SoFi soldiered on and grew its customer base.

“Thankfully”, investors only care about what happens from this point on, particularly over the next one, three, and five years.

Crunching all available data, 24/7 Wall St. provided a data-driven estimate of SoFi’s potential share price based on revenue and earnings projections, compared to similar companies.

Recent Performance 

In the past 4 years, SoFi has more than doubled revenue, but that top-line growth also carried a jump in total operating costs, particularly the $720 million in sales and marketing expense in 2023.

However, the increases in operating costs are money well spent with in-house technology improvements and member-generating marketing spending.

• SoFi doubled its revenue in the past 4 years (2020–2024) but also saw higher operating costs.

• In 2023, sales and marketing expenses reached $720 million, a significant increase.

• Higher costs were justified: (1)

  Investments in technology upgrades improved efficiency and (2)

  Marketing spending drove member growth, adding over 10 million users by 2024.

• As a result, revenue growth outpaced cost increases. In 2024 revenue hit $3.77 billion

Profits, see U soon ?

SoFi is closed to hitting an inflection point in profitability and has done a stellar job of (a) expanding revenue and (b) improving earnings per share (EPS).

As SoFi’s revenue grows, it becomes more profitable, meaning its costs per customer decrease.

This scalability is important because it means that as the company grows, it will become even more profitable.

Given that the financial industry is growing, and SoFi is outperforming its peers, there’s strong optimism that SoFi’s earnings per share will continue to rise.

Key Drivers.

(1) Expansion Financial Services:

• SoFi’s ambition to become a one-stop shop for financial services will likely drive future growth.

• It plans to continue expanding its product lineup, including new lending products, investment options, and insurance services, that will cater to a broader range of financial needs.

(2) Bank Charter & Deposit Base Expansion:

• Obtaining a national banking charter allows SoFi to use its growing deposit base to fund lending operations more efficiently.

• Access to lower-cost funds is expected to drive net interest income growth, enhancing profitability as SoFi scales its banking operations.

(3) Cross-Selling and Customer Retention: 

• SoFi’s strategy of cross selling its wide array of financial products aims to increase the average number of products per customer.

• This integrated approach is expected to (a) improve customer retention and (b) lifetime value, thereby boosting overall revenue and profitability.

1-Year Stock Price Prediction

The Wall Street consensus one-year price target for SoFi Technologies is $13.73, that would be a +9.9% gain based on 21 Mar 2025’s stock price.

Of the 19 analysts covering the stock, only 5 of 19 recommended a “Buy”.

24/7 Wall St. is even more cautious, with a $9.33 target price, suggesting a more than -25% retreat by the shares in 2025. (see below)

Share Price Estimates 2025-2030

24/7 Wall St. compared other fintech/lenders when deciding on SoFi’s price-to-sales valuation of 3.5x for the 5 years time frame of our analysis.

Included in the analysis were:

• $Block, Inc.(XYZ)$.

• $PayPal(PYPL)$.

• $Upstart Holdings, Inc.(UPST)$.

• LendingClub Corp(LC)$.

• Affirm Holdings Inc(AFRM)$.

This gives a blending valuation of around 3.3x sales.

24/7 Wall Str. estimated SoFi’s stock price to be $17.56 per share with 10% YoY revenue growth; resulting in the estimation over +40% higher than the current/calculated stock price of $11.31 (as of 11 Mar 2025). (see above)

My viewpoints: (mine only)

I believe the projections may come true only if US economy and politics remain relatively stable.

Unfortunately this does not seemed to be the case. (see below)

The mad-hatter president has decided to impose the 25% tariffs on automobiles imported into US from 03 Apr 2025 onwards.

For now, they will exempt car parts that falls within the US, Mexico & Canada free trade agreement.

As for SoFi, I will try my best not to dip-buy at the moment. This is because I think there will be greater bargains ahead. Now is time to be patient !

Good things come to those who wait - right ! Ha, ha, ha !

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

• NIO's Repeat Offense: If Only I Could Bail !

• US Economy & Market : Pre PCE report is Out.

• Time to Buy AT&T ($T) and Sell $LUMN ?

• Do you think the stimates are fairly accurate and SoFi will be able to hit the project stock price ?

• Do you think any stock price prediction should be taken with a pinch of salt given the discord that’s about to descend ?

If you find this post interesting, give it wings! ️ Repost and share the insights ?

Do consider “Follow me” and get firsthand read of my daily new post. Thank you.

@Daily_Discussion

@TigerPM

@TigerStars

@Tiger_SG

@TigerEvents