TLDR
- SoFi stock rose 3.6% on Monday to close at $19.24, driven by Trump’s proposed tax plan limiting federal student loans
- The proposed legislation could create opportunities for private lenders like SoFi by reducing federal loan availability
- Second-quarter earnings scheduled for July 29 with analyst expectations of $0.06 per share, up 500% year-over-year
- Stock has surged over 100% in the past three months following strong Q1 performance
- Wall Street maintains “Moderate Buy” rating with average price target of $14.85, suggesting 22.82% downside from current levels
SoFi Technologies shares climbed 3.6% on Monday, closing at $19.24 as investors reacted to President Donald Trump’s newly unveiled tax plan. The proposed legislation includes tighter limits on federal student loans, which could benefit private lenders like SoFi.
The tax bill has already passed the Senate and awaits a House vote. If approved, the legislation would lower the cap on federal graduate loans, potentially creating a funding gap for higher education students.
This gap represents a growth opportunity for SoFi’s core business. The company specializes in student loans and refinancing services, positioning it to capture borrowers who might otherwise rely on federal programs.
Trading volume reached 32.1 million shares on Monday, down 39% from the average session volume of 52.3 million shares. The stock hit an intraday high of $19.29 before settling at the close.
SoFi’s recent momentum builds on strong first-quarter results reported in April. The company posted revenue of $763.81 million, beating analyst estimates of $739.93 million by 3.2%.
Earnings per share came in at $0.06, doubling analyst expectations of $0.03. Revenue jumped 32.7% compared to the same quarter last year, while earnings per share increased from $0.02 in the prior year period.
The company maintained a net margin of 17.21% and return on equity of 3.34%. SoFi’s current ratio stands at 0.80 with a debt-to-equity ratio of 0.46.
Policy Tailwinds Create Growth Potential
The proposed federal loan restrictions could drive more students toward private lenders. SoFi’s platform would likely see increased demand if government funding becomes more limited.
Analysts view this policy shift as a potential catalyst for loan volume growth. The company’s established presence in the student lending market puts it in position to benefit from any reduction in federal support.
SoFi’s stock has surged over 100% in the past three months, reflecting investor confidence in the company’s business model and growth prospects. The shares trade well above their 50-day moving average of $14.52 and 200-day moving average of $14.05.
Earnings Expectations Build Ahead of July 29 Report
Wall Street analysts expect SoFi to report second-quarter earnings of $0.06 per share when results are released on July 29. This represents a 500% increase from the year-ago quarter.
Revenue projections call for $801.8 million, which would mark a 7% decrease from the prior year period. The earnings growth despite lower revenue expectations reflects improved operational efficiency.
The upcoming earnings report will provide insight into SoFi’s student lending performance. With the proposed tax bill in focus, investors will closely watch this segment for signs of growth.
Recent insider activity shows mixed signals. Director Magdalena Yesil sold 87,140 shares in June at an average price of $14.39, reducing her position by 23.15%.
Executive Vice President Kelli Keough also sold 11,520 shares in May at $13.38 per share, cutting her stake by 5.36%. These sales occurred before the recent rally.
Institutional investors have shown increased interest in SoFi. Teamwork Financial Advisors increased its position by 26.2% in the second quarter, while Voya Investment Management boosted its stake by 1.2%.
Hedge funds and institutional investors now own 38.43% of the company’s stock. This institutional backing provides additional support for the share price.
Wall Street maintains a “Moderate Buy” consensus rating based on seven Buy recommendations, five Hold ratings, and two Sell ratings. The average price target of $14.85 suggests the stock may be overvalued at current levels.
Analyst coverage includes positive ratings from Needham & Company with a $20 price target and JMP Securities with a $17 target. UBS Group raised its target to $15.50 while maintaining a neutral rating.
The company’s market capitalization reached $21.27 billion with a price-to-earnings ratio of 46.93. SoFi’s beta of 1.91 indicates higher volatility compared to the broader market.
SoFi will report second-quarter earnings on July 29, with Wall Street expecting $0.06 per share earnings and $801.8 million in revenue.
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