SOFI Stock Analysis! Earnings Review

Ajouté : 2026-05-07

[00:00:00]Many of you have asked me for an update on SoFi stock. The stock went down 15% after reporting earnings, but if you look at the chart of the numbers, not the actual chart, but the short of the numbers, you wouldn't imagine that the stock went down 15% on earnings. Net revenues were up 41%, which was a re-acceleration from 38% and 26% and even This is one of the highest quarterly revenue growth numbers in the company's history. It was pretty amazing for SoFi.

[00:00:33]Adjusted EBITDA margin has also expanded to 31%. Net income margin is down 15%.

[00:00:40]It used to be unprofitable 2 years ago.

[00:00:42]Now they're putting out 15%. I think long term they can get up to 25 to 30% net income margins. The company right now has almost 15 million members. They went from 3.8 million in 2022 to almost 15 million people on the platform. And the adult population is 250 million people. So SoFi doesn't even have a 10% market share in the United States and it's still growing 41% revenues. So that really tells you a lot about the runways of the business and how much it could potentially grow in general. They have a personal loans, they increased a lot, student loans as well, but home loans was really impressive. It's up almost 3x year over year and this is given fact that we have 6 and 1/2% on a 30-year mortgage in the United States. So imagine what's going to happen once it goes down to 5 and 1/2, 5.2%, which could happen with the new Fed chairman. This business will be booming like never before for SoFi. They also sold a lot of loans as they do every single quarter. They said it was above the fair value marks for the loan and normally put in the mark like let's say if they sold it 106% above fair value, they put 106%, 105%. They have a good track record of selling them above the listed fair value, but for this quarter they didn't really give us a number. I'm not really sure why, maybe because of the muddy waters report, maybe there's something going on.

[00:02:11]I'm not sure why no one asked about it because they kind of gave us normally numbers, but in this quarter they didn't give us a number. But they said it's above fair value. They have a history of doing it. They have a conservative underwriting standards. So I'm not too worried about it. The company has also expanded in crypto. They formed a partnership with Mastercard to enable SoFi USD settlements across their global payment network and the SoFi USD stablecoins that they launched is going to provide them a new business, which is called big business banking related offering, which is mainly like a for for big banks and banking clients that you know, transact in cash and in crypto, they can settle them and hold them within SoFi and SoFi is the only pretty much I believe regulated bank that issued a stablecoin. So there's a lot of benefits to that and the partnership with Mastercard is going to be amazing for the company, but there were a few negative things in the report. One of them was the continued deterioration in I believe the technology platform, that's what they call it and the contribution to profit went from 48 million to 12 million. This is the lowest ever. Now the company has been working on it, it's been struggling for a while. It used to be a more significant part of profits, now it's a lesser part of the overall profits. This is mainly a lending business and a tech business in general, but again they're getting better at it. They have some customers, which were not included in this quarter. They also want to launch a new offering for the technology business. They said in 2026 will be launching a new unified brand SoFi Technologies Solutions offering enterprise client product and services. So you know, things will start potentially getting better, but the platform business or technology platform business isn't really the best. But the main reason why the stock went down was due to them not raising guidance. They didn't lower guidance, they just confirmed guidance. But because a lot of investors were expecting SoFi to keep raising guidance because they have a history of doing it, they haven't done it this quarter and the stock tanked 15%. Now if you look at the guidance that they maintained, it was 30% revenue growth, guys. So this is pretty amazing.

[00:04:26]I I would not be upset for 30% revenue growth with a bank like SoFi, but the market had again different expectations.

[00:04:33]Those expectations were not met and the stock went down. They're also guiding earnings per share growth of 54%.

[00:04:41]I mean absolutely mind-blowing for the company. But the main reason why they did not raise guidance wasn't because the company is struggling or because there's some weakness in the economy, it was just mainly due to them issuing the initial guidance based on two rate cuts, okay? And they looked at the prediction markets, they looked at what the Fed chairman is saying and the geopolitical events. Now they're assuming that there will be no rate cuts. Now if you watched Kevin Warsh, he talks a lot about a deflationary pressures because of AI and implementing monetary policy based on long-term trends, not short-term trends.

[00:05:17]So we might end up having rate cuts and in this case, they might raise guidance again, but this kind of guidance assumes the worst-case scenario if there was no rate cuts whatsoever and I believe that's the right way to do it. But again, this is why the stock went down.

[00:05:33]It's all short-term stuff, but the long-term thesis is still intact for the company. Now a big concern that a lot of people have with SoFi is the dilution and I always get told in the comments, "What about the dilution, man? The company is diluting 10 or 12% of shares every single year." Yes, dilution is really, really bad, but what really matters is what they do with the money.

[00:05:55]If they're still growing in earnings per share or tangible book value per share or free cash flow per share much more than they issued, then this specific dilution was actually good because they allocated the money accordingly and they were able to create more per share of value than they issued. This is what happened with SoFi over here and they said, "We recognize there has been a lot of discussions around the capital raises impact of dilution." They said, "Based on our analysis, the capital raises would not be dilutive because tangible book value per share increased 57% year over year. So they diluted 10% of the stock, but they increased the tangible book value per share 57% year over year.

[00:06:38]This is massive, massive growth. And again, people tell me why why you don't value it like JP Morgan. JP Morgan is not increasing tangible book 57% year over year, maybe 10, 15% on the maximum 17%. 57% no other bank is doing it. So you can't just value the stock like you're valuing something like JP Morgan.

[00:06:57]But I talked about this in my last video and SoFi has a So the stock itself has a history of being a little bit you could say cyclical on a certain trend. So normally the first 4 months of the year are the worst. You could see it here on average. February is -9%, March is -13% on average, April is -6% on average.

[00:07:19]Then it starts getting better. May is 12%, average 3.7 for June. July it gets a little bit better, but the worst months of SoFi on average are the first you could say 3 to 4 months. And this is because the CEO tends to lower guidance or I should say issue guidance that's kind of lowballed or that's conservative for the year so he can then raise the guidance and beat it. This time he didn't raise guidance, but based on the chart, SoFi stock has likely seen the worst of its times and it's likely going to start to get better from here. It never had a negative months in May. June had some negatives, but on average it was up 3.7. July had four out of five negative positive years. So it's likely going to start to get better from here and I would not be surprised if the stock has potentially bottomed out on this news. Now if you look at long-term guidance, the long-term thesis is still intact. The stock is going down mainly because they're expecting no rate cuts and they didn't even lower guidance, they pretty much didn't raise guidance.

[00:08:20]So the whole reason is pretty much stupid. If you're a investor in SoFi, you should not be upset at all, you should be happy because the long-term thesis could even be better. The company is still guiding CAGR of earnings per share growth of about 42%. A massive jump from the current 60 cents for 2026 to about $8 and $5.07 mid-range for 2028. This is massive, massive growth.

[00:08:45]The company has grown in members, everything is getting better. But if you take the 2028 guidance of about $8.07, the stock right now is trading at about $15, which means it's trading at about 15 times earnings. So right now you're paying 15 times 2028 earnings for SoFi and even after 2028, I would not expect the company to grow 40 or 30% in earnings per share, but I would expect at least 15 to 20% and you're paying 15 times those earnings. So I believe the stock is undervalued. I think it's getting extremely undervalued. I think it's presenting good opportunity. You have an amazing CEO that used to work at Twitter, used to work at Goldman Sachs and he really cares a lot about shareholders. He bought the dip himself.

[00:09:32]I would not be surprised if he buys this upcoming dip again and I like the stock.

[00:09:36]I think it was an overreaction and I still believe it's undervalued and that's my opinion on SoFi. Hope you enjoyed it. It was not financial advice.

[00:09:44]If you did enjoy it, please press the like button and maybe consider subscribing. So I'll talk to you in another video.