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SoFi Technologies (SOFI)
NASDAQ:SOFI
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SoFi Technologies
(NASDAQ:SOFI)
63Neutral
Positive Factors
Client Base Diversification
SOFI is using the combined offering to attract a more diversified client base, which should help to lower client concentration risk and generate consistent revenue growth.
Financial Services Monetization
SoFi is expected to monetize its distinctive financial services offerings, emphasizing asset-light, fee-based revenue which could boost the company's valuation.
Revenue Growth
Management has positioned SoFi for above-average organic revenue and EBITDA growth, supported by strong financial services monetization and steady funding costs.
Negative Factors
Growth Outlook Adjustment
Investor concern has arisen as SOFI cut the outlook for the segment from mid 20%s to mid-teens due to longer lead times and implementation cycles as the average client size becomes bigger.
Loan Demand and Profitability
Slowing consumer spending and rising inflation could dent loan demand and credit performance, posing risks to SoFi’s profitability.
Valuation Concerns
SOFI’s execution has been solid, but there is concern that valuation is ahead of fundamentals, leading to an Underperform rating.
SoFi Technologies (SOFI) vs. S&P 500 (SPY)
Market Cap
$13.59B
Dividend YieldN/A
Average Volume (3M)53.65M
Price to Earnings (P/E)32.2
Beta (1Y)2.60
Revenue Growth29.33%
EPS GrowthN/A
CountryUS
Employees5,000
SectorFinancial
Sector Strength83
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)0.38
Shares Outstanding1,104,104,200
10 Day Avg. Volume52,841,090
30 Day Avg. Volume53,651,701
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.40
Price to Cash Flow (P/CF)-17.60
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$13.69Price Target Upside6.29% Upside
Rating ConsensusHold
Number of Analyst Covering17
SoFi Technologies Business Overview & Revenue Model
Company DescriptionSoFi Technologies, Inc. provides digital financial services. It operates through three segments: Lending, Technology Platform, and Financial Services. The company's lending and financial services and products allows its members to borrow, save, spend, invest, and protect their money. It offers student loans; personal loans for debt consolidation and home improvement projects; and home loans. The company also provides cash management, investment, and technology services. In addition, it operates Galileo, a technology platform that offers services to financial and non-financial institutions; and Apex, a technology enabled platform that provides investment custody and clearing brokerage services, as well as Technisys, a cloud-based digital multi-product core banking platform. The company was founded in 2011 and is headquartered in San Francisco, California.
How the Company Makes MoneySoFi Technologies makes money primarily through interest income, fee-based income, and capital markets revenue. Interest income is generated from lending products such as personal loans, student loan refinancing, and home loans, where the company earns interest on the principal amount lent to customers. Fee-based income arises from transactions and services such as wealth management, financial planning, and other financial services, including credit card fees and advisory services. SoFi also earns revenue through capital markets activities, which involve selling loans to investors and securitizing financial products. Additionally, SoFi benefits from its partnerships with other financial institutions and technology platforms, enhancing its product offerings and expanding its reach.
SoFi Technologies Financial Statement Overview
Summary
SoFi Technologies shows promising growth and profitability on the income statement, with improved margins and revenue growth. The balance sheet reflects a stable equity position and manageable debt levels, but the cash flow statement reveals challenges in cash generation and liquidity management. Overall, while the company is on a positive trajectory in terms of revenue and profit, it needs to address cash flow issues for sustainable financial health.Income Statement
SoFi Technologies has shown a strong revenue growth trajectory, with a significant increase from $2.07 billion in 2023 to $2.81 billion in 2024. The company turned profitable with a net income of $499 million in 2024, compared to a loss in the previous year. The Gross Profit Margin is healthy at 100%, indicating efficient cost management. However, the EBIT margin improved to 30.61% from a negative margin, reflecting better operational efficiency. Despite these improvements, the absence of EBITDA data limits a full assessment of earnings quality.72
Positive
Balance Sheet
The balance sheet shows a stable equity base increasing to $6.53 billion in 2024. The Debt-to-Equity ratio improved to 0.47, indicating manageable leverage levels. However, the Return on Equity is strong at 7.64%, showing that the company is generating profits from its equity. The Equity Ratio of 18% suggests a moderately leveraged capital structure, but there are potential risks associated with high liabilities relative to assets.65
Positive
Cash Flow
SoFi Technologies' cash flow performance is concerning, with a negative operating cash flow of $1.12 billion in 2024, though an improvement from previous years. The Free Cash Flow remains negative, indicating challenges in generating cash from operations to cover capital expenditures. The Operating Cash Flow to Net Income Ratio is negative, highlighting potential issues in converting income into cash flows.58
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.61B | 2.07B | 1.52B | 977.30M | 565.53M | Gross Profit |
| 2.64B | 2.07B | 1.52B | 977.30M | 565.53M | EBIT |
| 859.65M | -189.51M | -391.43M | -472.95M | -350.82M | EBITDA |
| 0.00 | 11.91M | -240.07M | -371.38M | -280.99M | Net Income Common Stockholders |
| 498.67M | -300.74M | -320.41M | -483.94M | -224.05M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.54B | 3.79B | 1.82B | 689.62M | 872.58M | Total Assets |
| 36.25B | 30.07B | 19.01B | 9.18B | 8.56B | Total Debt |
| 3.09B | 5.36B | 6.11B | 4.18B | 5.07B | Net Debt |
| 555.01M | 2.28B | 4.68B | 3.69B | 4.20B | Total Liabilities |
| 29.73B | 24.52B | 13.48B | 4.48B | 5.51B | Stockholders Equity |
| 6.53B | 5.55B | 5.53B | 4.70B | 3.05B |
| Cash Flow | Free Cash Flow | |||
| -1.12B | -7.35B | -7.36B | -1.40B | -503.88M | Operating Cash Flow |
| -1.12B | -7.23B | -7.26B | -1.35B | -479.34M | Investing Cash Flow |
| -4.82B | -1.89B | -106.33M | 110.19M | 258.95M | Financing Cash Flow |
| 5.03B | 10.89B | 8.44B | 684.99M | 853.75M |
SoFi Technologies Technical Analysis
Positive
12.88
Price Trends
12.52
Positive
14.13
Negative
11.61
Positive
Market Momentum
-0.14
Negative
58.90
Neutral
88.22
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOFI, the sentiment is Positive. The current price of 12.88 is above the 20-day moving average (MA) of 11.11, above the 50-day MA of 12.52, and above the 200-day MA of 11.61, indicating a bullish trend. The MACD of -0.14 indicates Negative momentum. The RSI at 58.90 is Neutral, neither overbought nor oversold. The STOCH value of 88.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOFI.
SoFi Technologies Risk Analysis
SoFi Technologies disclosed 94 risk factors in its most recent earnings report. SoFi Technologies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
SoFi Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $5.91B | 21.09 | 13.70% | 1.13% | 5.06% | ― | |
74 Outperform | $19.57B | 7.13 | 18.60% | 1.93% | 1.22% | 4.96% | |
73 Outperform | $5.82B | 24.34 | 14.15% | ― | 13.70% | -9.00% | |
69 Neutral | $9.77B | 17.68 | 3.84% | 3.65% | -2.90% | -43.64% | |
69 Neutral | $5.15B | 10.18 | 15.96% | 8.53% | 7.96% | -20.11% | |
63 Neutral | $13.59B | 32.22 | 8.26% | ― | 29.33% | ― | |
63 Neutral | $12.32B | 9.52 | 7.89% | 79.24% | 12.74% | -4.55% |
* Financial Sector Average
Performance Comparison
SOFI
SoFi Technologies
12.88
5.84
82.95%
CACC
Credit Acceptance
483.36
-45.64
-8.63%
FCFS
FirstCash
131.95
18.09
15.89%
ALLY
Ally Financial
32.92
-5.06
-13.32%
SYF
Synchrony Financial
51.42
7.57
17.26%
OMF
OneMain Holdings
48.79
1.87
3.99%
SoFi Technologies Earnings Call Summary
Earnings Call Date: Jan 27, 2025 | % Change Since: -28.13% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call for SoFi Technologies reflects a strong performance in 2024, marked by record member growth, significant revenue increases, and achieving first-time GAAP profitability. The company's strategic focus on fee-based revenue and expansion of services like SoFi Plus demonstrate a positive trajectory. However, challenges remain in the Tech Platform segment with slower growth than anticipated. The introduction of a higher tax rate is also noted. Overall, the positive achievements outweigh the lowlights, signaling a promising outlook for 2025.Highlights
Record Member Growth
SoFi reached over 10 million members, growing 34% year-over-year and 10x over the past five years, with 785,000 new members added in Q4 alone.
Strong Revenue Growth
Adjusted net revenue was $2.6 billion in 2024, up 26% year-over-year. The Financial Services and Technology Platform segments generated $1.2 billion, up 54% year-over-year.
First Full Year of GAAP Profitability
2024 marked SoFi's first full year of GAAP profitability, with net income of $499 million and adjusted EBITDA of over $665 million, achieving a 26% EBITDA margin.
Expansion of Fee-Based Revenue
Total fee-based revenue was $970 million, up 74% from the prior year, driven by origination fees, loan platform business, referrals, interchange, and brokerage.
Introduction of SoFi Plus
SoFi announced a new fee-based subscription option for SoFi Plus, providing over $1,000 of value annually for a low monthly fee or through direct deposit.
Lowlights
Challenges in Tech Platform Growth
The Tech Platform segment experienced slower than expected growth, leading to revised expectations of mid-teens CAGR from 2023 to 2026.
Higher Tax Rate Impact
SoFi expects a normalized effective tax rate of approximately 26%, impacting future net income compared to minimal tax impact in previous periods.
Company Guidance
In the SoFi Technologies Q4 and Full Year 2024 earnings call, the company provided robust guidance for 2025, highlighting expected growth and profitability. SoFi projects adding at least 2.8 million new members, a 28% year-over-year increase, and anticipates adjusted net revenue between $3.20 billion and $3.275 billion, representing a 23% to 26% growth. Adjusted EBITDA is forecasted at $845 million to $865 million, with an incremental EBITDA margin of 30%. The company also expects adjusted GAAP net income between $285 million and $305 million, translating to an EPS of $0.25 to $0.27. SoFi plans to continue investing in its Financial Services and Technology Platform segments, with a particular focus on scaling the Invest business and expanding its SoFi Plus subscription offering. The company remains confident in exceeding its medium-term guidance of 20% to 25% compounded annual revenue growth through 2026, supported by a strong business environment and strategic investments in innovation and brand building.SoFi Technologies Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
SoFi Technologies Approves New Performance Stock Unit Awards
Neutral
Mar 27, 2025
On March 21, 2025, SoFi Technologies’ Board of Directors approved new Performance Stock Unit Award Agreements under its 2021 Stock Option and Incentive Plan. These agreements, designed for the CEO, CFO, and certain senior employees, link performance-based stock units to tangible book value growth and total stockholder return over a three-year period. The initiative aims to align executive incentives with company performance, potentially impacting SoFi’s operational focus and stakeholder interests by emphasizing financial growth and market competitiveness.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.