Truist analyst Matthew Coad has begun covering SoFi Technologies (SOFI, Financial) with a Hold rating and a target price of $14. The firm expresses mixed emotions regarding the company. They are optimistic about SoFi's Financial Services arm, recognizing the potential in its loan platform and anticipating a steady rise in average revenue per user.
However, Truist cautions that the growth forecasts for SoFi in 2026 and 2027 may need to be adjusted downward. Additionally, there is concern that the current valuation of the stock does not adequately account for the credit risk inherent in SoFi's business model.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for SoFi Technologies Inc (SOFI, Financial) is $14.14 with a high estimate of $20.00 and a low estimate of $6.00. The average target implies an upside of 6.29% from the current price of $13.30. More detailed estimate data can be found on the SoFi Technologies Inc (SOFI) Forecast page.
Based on the consensus recommendation from 18 brokerage firms, SoFi Technologies Inc's (SOFI, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for SoFi Technologies Inc (SOFI, Financial) in one year is $11.32, suggesting a downside of 14.89% from the current price of $13.3. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the SoFi Technologies Inc (SOFI) Summary page.
SOFI Key Business Developments
Release Date: April 29, 2025
- Revenue: $771 million, up 33% year-over-year.
- Adjusted EBITDA: $210 million, up 46% year-over-year, with a margin of 27%.
- Net Income: $71 million, with a margin of 9%.
- Earnings Per Share (EPS): $0.06.
- Member Growth: Added 800,000 new members, reaching 10.9 million, a 34% year-over-year increase.
- Product Growth: Added 1.2 million new products, totaling 15.9 million, a 35% year-over-year increase.
- Financial Services Revenue: $303 million, more than double from Q1 2024.
- Lending Segment Revenue: $412 million, up 27% year-over-year.
- Loan Originations: $7.2 billion, up 66% year-over-year.
- Fee-Based Revenue: $315 million, up 67% year-over-year.
- Net Interest Income: $361 million, up 35% year-over-year.
- Deposits: Total deposits grew to over $27 billion.
- Tangible Book Value: $5.1 billion, a year-over-year increase of $946 million.
- Guidance for 2025: Adjusted net revenue expected between $3.235 billion to $3.310 billion; adjusted EBITDA expected between $875 million to $895 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SoFi Technologies Inc (SOFI, Financial) reported a 33% year-over-year increase in revenue, reaching a record $771 million for Q1 2025.
- The company added a record 800,000 new members, marking a 34% year-over-year growth, bringing the total to 10.9 million members.
- Adjusted EBITDA for the quarter was a record $210 million, up 46% year-over-year, with a margin of 27%.
- The Financial Services segment doubled its revenue year-over-year to over $300 million, driven by strong growth in SoFi Money and the Loan Platform Business.
- SoFi Technologies Inc (SOFI) increased its full-year guidance for adjusted net revenue and adjusted EBITDA, reflecting confidence in continued growth.
Negative Points
- Despite strong growth, the company faces macroeconomic uncertainties and potential volatility in interest rates, which could impact future performance.
- The Tech Platform segment saw a slight decrease in accounts, down 6% year-over-year, which could indicate challenges in client retention or acquisition.
- The company is heavily reliant on fee-based revenue, which, while growing, may face pressure if market conditions change or if competition intensifies.
- SoFi Technologies Inc (SOFI) continues to operate in a highly competitive environment, particularly in the financial services and technology sectors, which could impact margins.
- The company's strategy to expand into new areas such as crypto and blockchain is subject to regulatory changes, which could pose risks to execution and growth.
