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SoFi Technologies (SOFI)
NASDAQ:SOFI
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SoFi Technologies
(NASDAQ:SOFI)64Neutral
Positive Factors
Co-branded Opportunities
Winning one of the largest global hotel brand chains hints at what could potentially be a very large market for SoFi's growth.
Technological Excellence
SoFi's focus on technological excellence is a key differentiator, aiming to make it a top-10 bank with sustainable growth.
Negative Factors
Market Growth Concerns
Investors question whether the Total Addressable Market can support SoFi's ambitious member growth target.
SoFi Technologies (SOFI) vs. S&P 500 (SPY)
Market Cap
$14.35B
Dividend YieldN/A
Average Volume (3M)48.49M
Price to Earnings (P/E)34.3
Beta (1Y)2.78
Revenue Growth29.33%
EPS GrowthN/A
CountryUS
Employees4,400
SectorFinancial
Sector Strength93
IndustryCredit Finance
Share Statistics
EPS (TTM)0.38
Shares Outstanding1,096,540,200
10 Day Avg. Volume52,518,590
30 Day Avg. Volume48,486,082
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.69
Price to Cash Flow (P/CF)-18.60
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
$14.31Price Target Upside9.32% Upside
Rating ConsensusHold
Number of Analyst Covering16
SoFi Technologies Business Overview & Revenue Model
Company DescriptionSoFi Technologies, Inc. is a leading digital personal finance company based in the United States, offering a comprehensive suite of financial products and services. The company operates across several sectors, including lending, wealth management, and financial services, with a mission to help people achieve financial independence. Core products and services include student loan refinancing, personal loans, home loans, credit cards, investing, and banking products, all offered through an intuitive digital platform.
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 in its income statement with strong revenue growth and improved margins. However, the balance sheet reveals moderate leverage, and the cash flow statement highlights significant cash flow challenges, which dilute the overall financial performance.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 | |||
| 2.81B | 2.07B | 1.52B | 977.30M | 565.53M | Gross Profit |
| 2.64B | 2.07B | 0.00 | 0.00 | 0.00 | 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
Negative
13.09
Price Trends
15.41
Negative
14.21
Negative
10.69
Positive
Market Momentum
-0.52
Positive
36.16
Neutral
18.37
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOFI, the sentiment is Negative. The current price of 13.09 is below the 20-day moving average (MA) of 14.89, below the 50-day MA of 15.41, and above the 200-day MA of 10.69, indicating a neutral trend. The MACD of -0.52 indicates Positive momentum. The RSI at 36.16 is Neutral, neither overbought nor oversold. The STOCH value of 18.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SOFI.
SoFi Technologies Risk Analysis
SoFi Technologies disclosed 79 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $36.82B | 13.06 | 13.62% | ― | 10.06% | 38060.98% | |
73 Outperform | $66.75B | 16.88 | 20.31% | ― | 7.10% | 4.45% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
64 Neutral | $14.35B | 34.26 | 7.64% | ― | 29.33% | ― | |
64 Neutral | $5.78B | ― | -20.31% | ― | 24.50% | 49.38% | |
64 Neutral | $18.25B | ― | -7.14% | ― | 46.27% | 74.39% | |
53 Neutral | $1.33B | 25.75 | 3.83% | ― | 3.63% | 27.77% |
* Financial Sector Average
Performance Comparison
SOFI
SoFi Technologies
13.09
5.69
76.89%
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11.71
3.73
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67.48
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16.10%
XYZ
Block
59.43
-16.10
-21.32%
UPST
Upstart Holdings
59.26
33.27
128.01%
AFRM
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57.01
20.14
54.62%
SoFi Technologies Earnings Call Summary
Earnings Call Date: Jan 27, 2025 | % Change Since: -26.95% | Next Earnings Date: May 5, 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
Product-Related AnnouncementsBusiness Operations and Strategy
SoFi Technologies Surpasses 10 Million Member Milestone
Positive
Dec 17, 2024
SoFi Technologies announced it has surpassed 10 million members, marking significant growth in its digital financial services. This milestone highlights SoFi’s strategic focus on product innovation and its commitment to helping members achieve financial independence, underscoring its influential role in the financial services industry.
Private Placements and Financing
SoFi CEO Enters Prepaid Variable Forward Contract
Neutral
Dec 17, 2024
SoFi Technologies’ CEO, Anthony Noto, has entered into a prepaid variable forward contract involving 2 million shares of the company’s common stock, amounting to around 10% of his beneficial ownership but less than 1% of SoFi’s total outstanding shares. This arrangement provides Noto with liquidity while allowing him to retain voting and dividend rights. The contract, maturing in February 2028, requires settlement either in shares or cash, depending on SoFi’s stock price at that time, with a floor price of $13.06 and a cap price of $30.74, impacting Noto’s future participation in stock performance.
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.