SoFi Technologies (NASDAQ:SOFI) delivered what appeared to be solid Q2 results on Tuesday, beating estimates on both top and bottom lines. Despite the solid performance, the stock closed with a modest 1.23% gain after a day of volatile trading.
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Specifically, the company posted earnings per share of $0.01 for the quarter, beating the break-even forecast by analysts. Additionally, SoFi’s adjusted net revenue reached $597 million, exceeding the consensus estimate of $565 million.
In light of these results, SoFi has raised its guidance for the third quarter. The company now expects adjusted net revenue between $625 million and $645 million, above than the consensus estimate of $612 million. Additionally, SoFi projects adjusted EBITDA to be in the range of $160 million to $165 million, surpassing the consensus forecast of $158.5 million. The company also anticipates earnings per share of $0.04, compared to the consensus estimate of $0.03.
Each segment of SoFi’s business saw year-over-year revenue growth and demonstrated strong unit economics. The Financial Services segment, in particular, stood out with about 80% growth.
Despite these positive results, Wedbush’s David Chiaverini remains cautious. The analyst maintained an Underperform (i.e., Sell) rating on SoFi shares, with a $4 price target. If this target is reached, investors could face a potential loss of 46% from SoFi’s last closing price of $7.42. (To watch Chiaverini’s track record, click here)
Chiaverini explained his bearish stance, stating, “We maintain our UNDERPERFORM rating given lofty revenue growth guidance looking out to 2026 as tech platform revenue growth is delayed and credit quality could be negatively impacted in a recessionary environment.”
Overall, SoFi stock holds a Hold (i.e. Neutral) rating from the Wall Street analysts’ consensus, based on 16 recent reviews that break down to 4 Buys, 9 Holds, and 3 Sells. The shares are trading for $7.42 and their $8.15 average target price implies a gain of ~10% in the next 12 months. (See SOFI stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
