TLDR
- SoFi Technologies (SOFI) reports Q3 earnings Tuesday, with Wall Street expecting EPS of $0.17 and revenue of about $1.25 billion.
- Monness started coverage with a Buy rating and a $20 price target, while KBW kept a Sell and cut its target to $15 from $16.
- The stock is down about 45% this year and trades near $14.50.
- Product count rose 42% to 24.4 million in Q2, and existing members opened 51% of new products.
- Options data leans bullish, with a put-to-call ratio of 0.50x on contracts expiring Oct. 30.
SoFi Technologies (SOFI) stock was trading near $14.50 on Monday, down about 1%, with earnings due Tuesday, October 27. The stock has dropped about 45% this year and sits at roughly half its early January price.
Wall Street expects third-quarter earnings per share of $0.17, up about 55% from a year ago. Revenue is projected to rise about 30% to $1.25 billion.
The slide has been tied to worries about high interest rates and pressure on the lending business. Many investors have treated the rate reset as lost earnings power.
Monness Starts Coverage With a Buy
Monness Crespi Hardt analyst Gustavo Gala started coverage with a Buy rating and a $20 price target. That target implies roughly 40% upside from current levels.
Gala sees the rate reset as a largely hedged, one-time hit. He noted the stock trades at 13.2x his FY28 earnings estimate, near the low end of its range since late 2023.
Deposits total $45.5 billion, mostly from direct-deposit customers. That money funds lending to prime, high-income borrowers.
Member count grew about 35% in the second quarter, while product growth came in at 42%, reaching 24.4 million. Existing members opened 51% of new products, up from 35% a year earlier.
Gala does see a possible Q3 miss tied to fair-value accounting on personal loans. He calls it a temporary sensitivity, not a sign of weak fundamentals.
KBW Stays Cautious
Keefe, Bruyette & Woods analyst Timothy Switzer kept his Sell rating. He trimmed his price target to $15 from $16.
Switzer estimates that rising rates in the third quarter and balance sheet growth created a gross headwind of more than $1 billion before hedging. That likely means a less favorable revenue mix.
He still expects SoFi to meet Q3 consensus. His warning is about another quarter of high loan growth and a further drop in capital levels.
Overall, Wall Street rates the stock a Moderate Buy, with nine Buys, seven Holds and three Sells. The average price target of $20.44 points to 41.4% upside.
On valuation, SoFi trades at a forward price-to-earnings ratio of about 24x. Robinhood (HOOD) sits at 44x.
Options traders are leaning toward the bulls. The put-to-call ratio on contracts expiring Oct. 30 is 0.50x, and the upper price on those contracts is $15.66, pointing to a possible 8% move higher by the end of the week.
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