TLDR
- SoFi (SOFI) stock declined 13.9% over the past month despite strong Q4 2024 earnings
- The company’s 2025 guidance fell short of market expectations with projected EPS of $0.25-$0.27 versus consensus of $0.292
- Despite guidance concerns, SoFi expects continued growth with adjusted net revenue between $3.20-$3.275 billion
- The company plans to add 2.8 million new members in 2025 and expand its product lineup
- Wall Street analysts rate SoFi as a “Hold” with an average price target of $14.64
SoFi Technologies, Inc. (SOFI) has recently drawn significant investor attention as its stock dropped 13.9% over the past month, outpacing the broader market’s 2.3% decline.
The fintech company reported impressive Q4 2024 earnings with revenues of $739.11 million, representing a 24.4% year-over-year increase. This surpassed analyst expectations by 8.8%.
SoFi’s earnings per share reached $0.05, showing solid growth from $0.02 a year ago and beating consensus estimates by 25%. The company has now topped revenue estimates in four consecutive quarters.
Despite these strong results, investors responded negatively to SoFi’s outlook for 2025. The company projected GAAP earnings per share between $0.25 and $0.27, falling short of Wall Street’s consensus estimate of $0.292.
Similarly, SoFi’s Q1 2025 forecast of $0.03 EPS came in below the expected $0.062. This guidance shortfall was a key factor in the stock’s recent decline.
The company’s projected adjusted EBITDA of $845 million to $865 million also missed analyst forecasts of $913.5 million. These misses contributed to investor concerns about near-term growth.
Some market watchers attribute part of the stock decline to profit-taking behavior. Before the recent drop, SoFi shares had gained an impressive 111.13% over the past year.
Analyst opinions have been mixed, with Morgan Stanley maintaining an “underweight” rating on the stock. This has added to investor caution about SoFi’s current valuation.
For the current quarter, SoFi is expected to post earnings of $0.04 per share, which would represent a 100% improvement from the year-ago period. However, this consensus estimate has decreased by 32.7% over the last 30 days.
Looking at the full fiscal year, analysts expect earnings of $0.26 per share, a 73.3% increase from the prior year. This estimate has been revised downward by 9.2% in the past month.
Revenue growth remains strong
The company’s revenue growth remains strong, with consensus sales estimates for the current quarter at $740.83 million, indicating a 27.6% year-over-year increase. For the current and next fiscal years, estimates of $3.26 billion and $3.98 billion suggest growth of 25% and 22.1%, respectively.
Despite near-term concerns, SoFi’s 2025 projections still show meaningful growth. The company expects adjusted net revenue between $3.20 billion and $3.275 billion, higher than its previous estimate of $3.05 billion.
SoFi plans to add 2.8 million new members in 2025, showing continued strong user acquisition. The company also intends to expand its product lineup, potentially adding a premium credit card and new lending options.
Based on the assessments of 16 Wall Street analysts, SoFi stock currently carries a “Hold” rating. The average price target stands at $14.64, suggesting a modest upside potential of 1.95% from current levels.
The company currently trades at a premium valuation compared to peers in the financial services industry, holding a Zacks Rank #3 (Hold), indicating it may perform in line with the broader market in the near term.
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