SoFi Technologies (SOFI) surged 23% following its recent quarterly profit report, revealing Q4 2023 earnings per share of two cents, exceeding forecasts. A further SOFI stock analysis suggests this is just the beginning.
Moreover, the company exhibited improved financial stability, experiencing growth and reducing operational risks, attracting a growing customer base. Despite lingering risks related to customer financial conditions, for those open to risk, SOFI stock may sustain its upward trajectory. In this SOFI stock analysis we’ll dig into recent developments and why these may be a signal to buy now.
Excellent Earnings Report
SoFi technologies surged 19% on January 29 after the online bank released its quarterly earnings report. The company’s Q4 results showed a net income of $47.9 million, the first in many years.
CEO Anthony Noto highlighted that 40% of adjusted net revenue came from non-lending segments at SoFi. Lending also increased, with significant growth in personal, student, and home loan origination volumes.
The platform also added 585,000 new members, amounting to 7.54 million by year-end. This was a 44% increase from 2022. Total deposits grew by $2.9 billion in the quarter, reaching $18.6 billion by year-end. Overall, over 90% of SoFi Money deposits came from direct deposit members.
SoFi forecasted 2024 earnings per share to come in at 8 cents, with revenue of $560 million. This strong outlook allowed the company’s share price to surge, with the stock now more Ethan 35% higher on a year-over-year basis at the time of writing.
Wall Street’s SOFI Stock Analysis
Due to its excellent Q4 earnings report, Wall Street is stirring with anticipation, following its own SOFI stock analysis. Many mixed opinions are now forming on the company, with experts still divided on whether SoFi is a buy. Many consider factors such as guidance reports, profitability, segment growth, and fair value are being considered by analysts, with varying views.
Being the first quarter to show a profit, SoFi reported a rather impressive 2 cents per share earnings. This exceeded forecasts for a quarter that was expected to be a break-even three month period.
While analysts have varying views, Mizuho Securities expressed confidence and optimism towards SoFi and gave the stock a buy rating. At the same time, Wedbush remained cautious, citing potential lending segment growth limitations and concerns about tech segment growth offsetting constraints.
Experts have mixed opinions on SoFi’s stock, with an equal number advising buying and selling. Most, 12 out of 20, suggest holding. Price targets vary widely, from a high of $15 to a low of $3, averaging at $9.22, indicating 18% potential upside from current levels.
SoFi’s upbeat earnings, marking its first quarterly profit, have certainly fueled optimism. Yet, concerns about its loan portfolio, especially unsecured loans, led to previous declines and bearish 12-month forecasts in recent months.
SoFi is a Buy
Founded in 2011 by Stanford business school students frustrated with student loan inefficiencies, SoFi addressed many industry flaws.
Leveraging automation, the company offered convenient, cost-effective student loan refinancing, disrupting the traditional, property-heavy banking model. SoFi, holding a federal bank charter, ceased crypto trading services amid regulatory pressure.
Thus, SoFi remains an integral fintech stock worth considering for its exposure to both student loans and other lending and financial products. For those bullish on the future of online banking SoFi is one top option I think could continue to capture market share in this growing space. I tend to side with the bullish analysts following its recent earnings report, and think this stock could have much more room to run from here.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.