Company Reports

No-moat-rated SoFi Technologies reported first-quarter earnings that were roughly in line with our expectations, though the company did report slower growth as it takes a more conservative approach to its lending segment. Adjusted net revenue increased 26.2% from last year but declined 2.2% from last quarter to $580.6 million. Meanwhile, earnings per share increased to $0.08 from a loss of $0.05 last year, though this includes a one-time $59 million gain on extinguishment of debt, without which the 2024 earnings per share would have been only $0.02. As we incorporate these results, we do not plan to materially alter our $13 fair value estimate. We see the shares as significantly undervalued.

SoFi Technologies targets young, high-income individuals who may be underserved by traditional full-service banks. The company is purely digital and engages with its clients exclusively through its mobile app and website. Unlike existing digital banks, which generally have limited product offerings, SoFi offers a full suite of financial services and products including everything from student loans to estate planning. The intent is that this will allow its customers to structure the entirety of their finances around SoFi. By acting as a one-stop shop for its customers' finances, SoFi intends to create powerful cross-selling advantages that will reduce its cost of acquisition.

SoFi Technologies targets young, high-income individuals who may be underserved by traditional full-service banks. The company is purely digital and engages with its clients exclusively through its mobile app and website. Unlike existing digital banks, which generally have limited product offerings, SoFi offers a full suite of financial services and products including everything from student loans to estate planning. The intent is that this will allow its customers to structure the entirety of their finances around SoFi. By acting as a one-stop shop for its customers' finances, SoFi intends to create powerful cross-selling advantages that will reduce its cost of acquisition.

No-moat-rated SoFi reported solid fourth-quarter results as the company delivered its first profitable quarter ever. Net revenue increased 35% from last year and 15% from last quarter to $615 million. Net income increased to $48 million from a net loss of $40 million last year. Along with earnings, SoFi provided medium-term growth expectations. The company anticipates GAAP earnings per share of $0.55 to $0.80 in 2026, higher than our own projection of $0.48. As we incorporate these results, we do not plan to materially alter our $14.50 per share fair value estimate. We see the shares as meaningfully undervalued.

We are raising our Uncertainty Rating for SoFi to Very High from High as the company increases its exposure to consumer credit quality—through its rapidly expanding loan book—during a period of rising charge-offs and delinquencies for consumer debt industrywide.

SoFi Technologies targets young, high-income individuals who may be underserved by traditional full-service banks. The company is purely digital and engages with its clients exclusively through its mobile app and website. Unlike existing digital banks, which generally have limited product offerings, SoFi offers a full suite of financial services and products including everything from student loans to estate planning. The intent is that this will allow its customers to structure the entirety of their finances around SoFi. By acting as a one-stop shop for its customers' finances, SoFi intends to create powerful cross-selling advantages that will reduce its cost of acquisition.

No-moat-rated SoFi Technologies reported solid third-quarter earnings as strong deposit and loan growth drove results higher. Net revenue increased 27% from last year and 7.9% from last quarter to $531 million. Excluding a $247 million goodwill impairment expense, net losses narrowed to $19.5 million from $74.2 million last year. With the release SoFi also raised its 2023 net revenue guidance from between $1.974 billion and $2.034 billion to $2.045 billion and $2.065 billion. Given the updated guidance, we think it is now likely that SoFi will achieve its goal of GAAP profitability by the end of 2023. While these were good results, we do not expect to materially alter our $14.50 fair value estimate for SoFi.

No-moat-rated SoFi Technologies reported strong second-quarter results as it enjoyed strong deposit growth and personal loan originations. Net revenue increased 37% from last year to $498 million, and increased revenue against fixed costs led to better margins, with net loss improving to $47.5 million from $95.8 million last year. As we incorporate these results, we are increasing our fair value estimate to $14.50 per share from $14. Roughly half of the increase reflects the time value of money since our last update, while the remainder is due to lower near-term expense growth projections as we now expect SoFi to be profitable during 2024.

SoFi Technologies targets young, high-income individuals who may be underserved by traditional full-service banks. The company is purely digital and engages with its clients exclusively through its mobile app and website. Unlike existing digital banks, which generally have limited product offerings, SoFi offers a full suite of financial services and products including everything from student loans to estate planning. The intent is that this will allow its customers to structure the entirety of their finances around SoFi. By acting as a one-stop shop for its customers' finances, SoFi intends to create powerful cross-selling advantages that will reduce its cost of acquisition.

No-moat-rated SoFi Technologies reported solid first-quarter earnings as the firm's impressive deposit growth and rising interest rates drove strong net interest income, though firmwide sequential revenue growth did slow meaningfully. Net revenue increased 43% year over year and 3.4% sequentially to $472 million. Revenue growth continues to outpace expenses, and the firm's net loss per share narrowed to $0.05 from $0.14 last year, giving more credence to SoFi's guidance for GAAP profitability by the end of 2023. As we incorporate these results, we are maintaining our $14 per share fair value estimate.

SoFi targets young, high-income individuals who may be underserved by traditional full-service banks. The company is purely digital and engages with its clients exclusively through its mobile app and website. Unlike existing digital banks, which generally have limited product offerings, SoFi offers a full suite of financial services and products that includes everything from student loans to estate planning. The intent is that this will allow its customers to structure the entirety of their finances around SoFi. By acting as a one-stop shop for its customers' finances, SoFi intends to create powerful cross-selling advantages that will reduce its cost of acquisition.

No-moat-rated SoFi Technologies reported solid fourth-quarter results as the benefit of its impressive deposit growth was partially offset by slower loan origination and weak growth in its technology platform segment. SoFi’s net revenue grew 60% from last year and 7.7% sequentially to $456.7 million. While the company remains unprofitable, its net loss did narrow to $0.05 per share from $0.15 last year, and SoFi now expects to reach profitability by the end of 2023. As we incorporate these results, we maintain our $14.50 fair value estimate and see the shares as undervalued.

SoFi targets young, high-income individuals who may be underserved by traditional full-service banks. The company is purely digital and engages with its clients exclusively through its mobile app and website. Unlike existing digital banks, which generally have limited product offerings, SoFi offers a full suite of financial services and products that includes everything from student loans to estate planning. The intent is that this will allow its customers to structure the entirety of their finances around SoFi, and the company’s reward structures are designed to encourage its clients to do so. By acting as a one-stop shop for its customers' finances, SoFi intends to create powerful cross-selling advantages that will reduce its cost of acquisition and give it a competitive advantage.

No-moat SoFi Technologies reported strong third-quarter earnings that came in above our expectations, as its recently acquired bank charter and rising interest rates continue to drive impressive net interest income growth for the company. Net revenue increased 56% from last year and 16.8% sequentially to $424 million. That said, the company remains unprofitable, losing ($0.09) per share compared with ($0.05) last year, which benefited from a $64.4 million fair value adjustment, and ($0.12) last quarter. As we incorporate these results, we do not plan to alter our $15 fair value estimate.

No-moat-rated SoFi technologies reported solid second-quarter earnings as weak student loan origination was offset by personal loans and deposit growth that came in well above our expectations. SoFi’s net revenue grew 57% year over year and 9.7% from last quarter to $362.5 million. As we incorporate these results, we do not expect to materially alter our $15 fair value estimate for SoFi.

SoFi targets young, high-income individuals who may be underserved by traditional full-service banks. The company is purely digital and engages with its clients exclusively through its mobile app and website. Unlike existing digital banks, which generally have limited product offerings, SoFi offers a full suite of financial services and products that includes everything from student loans to estate planning. The intent is that this will allow its customers to structure the entirety of their finances around SoFi, and the company’s reward structures are designed to encourage its clients to do so. By acting as a one-stop shop for its customers' finances, SoFi intends to create powerful cross-selling advantages that will reduce its cost of acquisition and give it a competitive advantage in the marketplace.

No-moat rated SoFi Technologies announced decent first-quarter results, though the report was marred by soft guidance and an unintended early release of the report itself. SoFi’s revenue grew 68.5% year over year and 15.7% sequentially to $330 million. That said, SoFi continues to spend aggressively, and despite strong revenue growth, the company reported a net loss of $0.14 per share. Along with the release the company raised its 2022 revenue guidance to between $1.505 billion and $1.510 billion, though its second-quarter guidance of $330 million to $340 million in revenue and $5 million to $15 million in adjusted EBITDA was lower than our expectations.

SoFi targets young, high-income individuals who may be underserved by traditional full-service banks. The company is purely digital and engages with its clients exclusively through its mobile app and website. Unlike existing digital banks, which generally have limited product offerings, SoFi offers a full suite of financial services and products that includes everything from student loans to estate planning. The intent is that this will allow its customers to structure the entirety of their finances around SoFi, and the company’s reward structures are designed to encourage its clients to do so. By acting as a one-stop shop for its customers' finances, SoFi intends to create powerful cross-selling advantages that will reduce its cost of acquisition and give it a competitive advantage in the marketplace.

SoFi targets young, high-income individuals who may be underserved by traditional full-service banks. The company is purely digital and engages with its clients exclusively through its mobile app and website. Unlike existing digital banks, which generally have limited product offerings, SoFi offers a full suite of financial services and products that includes everything from student loans to estate planning. The intent is that this will allow its customers to structure the entirety of their finances around SoFi, and the company’s reward structures are designed to encourage its clients to do so. By acting as a one-stop shop for its customers' finances, SoFi intends to create powerful cross-selling advantages that will reduce its cost of acquisition and give it a competitive advantage in the marketplace.

The Biden administration has announced an additional extension for the federal student loan forbearance program currently in effect, which was slated to expire at the start of May. With the newly announced extension, federal student loans will not accrue interest or require payment until August 31. This program has been a headwind for SoFi since it was put into place in 2020, as most of its student loan volume comes from refinance transactions. There is less incentive for borrowers to refinance loans that are in forbearance, and SoFi’s student loan origination volume has suffered as a result, with $4.3 billion of student loans made in 2021 compared to $6.7 billion in 2019. SoFi has been able to grow its lending operations despite this decline, owing to success of its strong personal loan and mortgage operations, but the extension is a negative event for the company. However, at the current price we believe the impact of the extension is fully priced into the shares.