SoFi Technologies, Inc. SOFI will report its fourth-quarter 2024 results on Jan. 27, before the bell.
The Zacks Consensus Estimate for earnings in the to-be-reported stands at 12 cents, indicating 133.3% growth from the year-ago reported quarter. The consensus estimate for total revenues stands at $2.54 billion, indicating 22.3% year-over-year growth. There has been no change in analyst estimates or revisions lately.
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The company’s earnings surpassed the Zacks Consensus Estimate in all the last reported quarter, with a 25% earnings surprise.
SoFi Technologies, Inc. Price and EPS Surprise
SoFi Technologies, Inc. price-eps-surprise | SoFi Technologies, Inc. Quote
SOFI May Deliver Q4 Earnings Beat
Our proven model predicts a likely earnings beat for SOFI this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
SOFI has an Earnings ESP of +1.88% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
SOFI’s Strong Segmental Growth Should be the Driver in Q4
We expect a significant year-over-year improvement in the company’s top line in the to-be-reported quarter, driven by healthy business from the Financial Services and Technology Platforms segments.
The consensus estimate for Financial Services revenues is pegged at $255 million, indicating 83.5% year-over-year growth. The consensus mark for Technology Platforms revenues is pegged at $110 million, indicating 13.4% year-over-year growth. The lending segment is expected to decline 5%.
SOFI Stock is in a Great Mood
The company’s shares have witnessed a notable surge of 148% in the past six months. This rise is significant, especially compared to the 16% growth of its industry and the 13% rise of the Zacks S&P 500 composite.
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Currently, the stock appears to be overvalued. The forward 12-month Price/Earnings ratio stands at 59.34X forward earnings, which is way higher than the industry’s average of 16.5X. It is trading above its 50-day moving average.
Investment Considerations
The demand for online financial platforms is expected to rise, and SOFI's technology platform, Galileo, is integral to its banking business and is being adopted by other financial firms. This expansion positions SOFI to capture more market share from traditional banks. Conventional banking giants like JPMorgan JPM, Bank of America BAC and Wells Fargo WFC are more mature and are experiencing slower growth.
The Federal Reserve's recent rate cuts have significantly boosted SOFI by alleviating pressure on its lending business. Lower interest rates reduce borrowing costs, encouraging more customers to take loans and refinance existing ones. This improves SoFi’s loan origination volumes and enhances its overall profitability.
SOFI's student loan-refinance business stands due to less generous loan-forgiveness policies under the Trump administration. Stricter forgiveness criteria may prompt borrowers to seek refinancing options to lower repayment costs, creating opportunities for SoFi to expand its customer base.
SOFI is a Buy
SOFI presents an attractive investment opportunity ahead of its fourth-quarter 2024 earnings report. With a projected 133.3% year-over-year earnings growth and a 22.3% revenue increase, the company’s robust performance reflects strong segmental growth in Financial Services and Technology Platforms.
The demand for online financial platforms and SOFI’s innovative offerings, like Galileo, position it to capture market share from traditional banks. Recent Fed rate cuts enhance its lending potential, while stricter loan-forgiveness policies under the Trump administration may favor its student-loan refinancing segment.
While SOFI’s valuation metrics suggest it is trading at a premium, this high valuation reflects its robust growth trajectory and strong market positioning. A 148% surge in the stock price over the past six months highlights investor confidence and the company’s ability to outperform both its industry and the broader market.
Investors often pay a premium for companies like SOFI, which demonstrate scalable potential, industry leadership and consistent growth, making it a compelling buy even at elevated valuations.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
