TLDR
- SoFi Technologies (SOFI) stock trades near $14.50 ahead of Q3 earnings Tuesday, with Wall Street expecting EPS of $0.17 and revenue of about $1.25 billion.
- Monness started coverage with a Buy rating and a $20 target, while KBW kept a Sell and cut its target to $15 from $16.
- The stock is down about 45% this year and sits at roughly half its early January price.
- Product count rose 42% to 24.4 million in Q2, and existing members opened 51% of new products.
- Options traders lean bullish, with a put-to-call ratio of 0.50x on contracts expiring Oct. 30.
SoFi Technologies (SOFI) stock was down about 1% on Monday, trading near $14.50. The fintech reports third-quarter earnings Tuesday, October 27.
The stock has fallen about 45% this year. It now sits at roughly half its early January price.
Wall Street expects earnings per share of $0.17, up about 55% from a year ago. Revenue is forecast to rise about 30% to $1.25 billion.
Worries about high interest rates have weighed on the stock. Investors have also fretted about pressure on the growing lending business, and it has been a rough ride for holders.
Monness Starts With a Buy
Monness Crespi Hardt analyst Gustavo Gala started coverage with a Buy rating and a $20 price target. That is about 40% above where the stock trades now.
Gala says the market is treating the rate reset as lost earnings power. He sees it as a mostly hedged, one-time hit.
The stock trades at 13.2x his FY28 earnings estimate. That is near the low end of its range since late 2023.
SoFi holds $45.5 billion in deposits, mostly from direct-deposit customers. Those funds back loans to prime, high-income borrowers.
Members grew about 35% in the second quarter. Products grew 42% to 24.4 million.
Existing members opened 51% of new products, up from 35% a year earlier. Gala reads that as proof the cross-selling is working.
He does flag a possible Q3 miss tied to fair-value accounting on personal loans. In his view, that is a short-term quirk and not a sign of weak fundamentals.
KBW Sticks With Sell
Keefe, Bruyette & Woods analyst Timothy Switzer kept his Sell rating. He cut his price target to $15 from $16.
Switzer estimates rising rates and balance sheet growth created a gross headwind of more than $1 billion before hedging. He says that likely means a less favorable revenue mix.
He still expects SoFi to meet Q3 consensus. His concern is another quarter of fast loan growth and lower capital levels.
Across Wall Street, the consensus rating is Moderate Buy, with nine Buys, seven Holds and three Sells. The average price target of $20.44 implies 41.4% upside.
SoFi trades at a forward price-to-earnings ratio of about 24x. Robinhood (HOOD) trades at 44x.
Options traders lean bullish. The put-to-call ratio on contracts expiring October 30 is 0.50x, and the upper price on those options is $15.66, pointing to a possible 8% gain by the end of the week.
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