Shares of SoFi Technologies (SOFI) plunged in pre-market trading even though the company reported robust Q4 results. The fintech company’s adjusted earnings increased by 150% year-over-year to $0.05 per share, above consensus estimates of $0.04 per share.
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SOFI’s Revenue Growth Driven by Tech and Financial Services
Furthermore, the company’s adjusted net revenues soared by 24% year-over-year to $739.1 million in the fourth quarter. This surpassed Street estimates of $674.6 million. SOFI’s growth in revenues was driven by its financial services and tech platform segments, which comprised 49% of its total adjusted net revenue.
Additionally, SoFi set new quarterly records in the fourth quarter with 785,000 member additions to its platform, while 1.1 million members took advantage of the company’s products.
SOFI Poised to Lead Fintech Revolution
The robust results reinforced the optimism of bullish analysts, as highlighted by the TipRanks “Bulls Say, Bears Say” tool. These analysts believe that the company could potentially become a “leading player in the neo/digital bank space, akin to an ‘American Express’ of fintech.”
SOFI Issues Q1 and FY25 Guidance
Looking ahead, the company expects an incremental EBITDA margin of around 30% in FY25, as it “re-invests in the business to continue to drive durable growth and strong returns well into the future.” In Q1, SOFI has projected adjusted net revenues in the range of $725 to $745 million with earnings likely to be $0.03 per share. For reference, analysts were expecting the company to report earnings of $0.06 per share on revenues of $699 million.
Additionally, in FY25, SOFI expects adjusted net revenue between $3.2 and $3.275 billion with earnings likely to be in the range of $0.25 to $0.27 per share. For reference, analysts were expecting the company to report earnings of $0.29 per share on revenues of $3.05 billion.
Furthermore, the company expects to add at least 2.8 million new members in 2025, a rise of 28% year-over-year.
Is SoFi a Good Stock to Buy Now?
Analysts remain sidelined about SOFI stock, with a Hold consensus rating based on six Buys, five Holds, and four Sells. Over the past year, SOFI has skyrocketed by more than 90%, and the average SOFI price target of $13.19 implies a downside potential of 26.4% from current levels. These analyst ratings are likely to change following SOFI’s results today.
