Morningstar

SoFi Earnings: Raising Fair Value Estimate on Blowout Results

SoFi saw accelerated loan growth and net interest margin expansion in the quarter.

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Securities in This Article
SoFi Technologies Inc Ordinary Shares
(SOFI)

Key Morningstar Metrics for SoFi Technologies

  • Fair Value Estimate
    : $18.80
  • Morningstar Rating
    : ★★★
  • Morningstar Economic Moat Rating
    : Narrow
  • Morningstar Uncertainty Rating
    : Very High

What We Thought of SoFi Technologies’ Earnings

SoFi Technologies SOFI reported strong third-quarter earnings as a sharp increase in net interest income drove better-than-expected results. Net revenue increased 44% from last year to $1.38 billion, while diluted EPS rose to $0.18 from $0.14. These results translate to a return on equity of 9.9%.

Why it matters: SoFi’s shares are trading a double-digit percentage higher on Oct. 27. The market’s reaction is understandable, as SoFi’s results and newly issued 2027 guidance were both comfortably ahead of our initial expectations for the quarter.

  • SoFi’s net interest income jumped a staggering 59% from last year to $929.5 million. This was primarily driven by loan growth, with average interest-earning assets rising 51%, but the firm also enjoyed net interest margin expansion.
  • SoFi’s NIM expanded to 6.14% from 5.84% last year and 5.98% last quarter. Despite the bank’s strong deposit growth, up 36.8% year to date, SoFi has gotten steadily more aggressive on deposit rates. The firm now enjoys one of the lowest deposit costs among the consumer finance firms we cover.

The bottom line: After incorporating third-quarter earnings into our model, we are increasing our fair value estimate for narrow-moat SoFi to $18.80 per share from $17.80. After the increase, we see the shares as modestly undervalued following their weak performance so far in 2026.

  • The bulk of the increase in our fair value estimate comes from higher near-term net interest income growth projections. We now expect NII to increase 45.1% and 37% in 2026 and 2027, respectively, up from 38.2% and 32.3% previously.
  • In general, we think SoFi’s shares have been oversold in 2026, following a necessary correction in excessive loan platform revenue expectations. While we agree SoFi was significantly overvalued at the start of the year, the market has swung too far in the opposite direction, ignoring fantastic performance in the rest of SoFi’s business.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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