On Tuesday, Goldman Sachs maintained a Neutral rating on SoFi Technologies (NASDAQ: NASDAQ:SOFI) with a steady price target of $7.50. The fintech company reported third-quarter 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $186 million, surpassing both Goldman Sachs' and the consensus estimates of $182 million and $166 million, respectively. SoFi's adjusted revenue also exceeded expectations at $689 million, compared to the predicted $637 million by Goldman Sachs and $636 million by consensus.
The stronger-than-anticipated financial results were largely attributed to SoFi's Lending segment, which posted a contribution profit of $239 million, significantly higher than the $192 million and $195 million expected by Goldman Sachs and consensus. This success was attributed to higher-than-forecasted personal loan originations.
Additionally, the Financial Services segment recorded a contribution profit of $100 million, outperforming Goldman Sachs' and consensus projections of $79 million and $69 million, respectively. The Technology segment's contribution profit was slightly below expectations at $33 million, against the $36 million and $37 million forecasted by Goldman Sachs and consensus.
Following these results, SoFi has updated its 2024 guidance. The company now anticipates revenue to be between $2.535 billion and $2.550 billion, up from the previous range of $2.43 billion to $2.47 billion. EBITDA expectations have been raised to $640 million to $645 million, compared to the former estimate of $605 million to $615 million. Earnings per share (EPS) are forecasted to be in the range of $0.11 to $0.12, an increase from the earlier $0.09 to $0.10. The tangible book value (TBV) is also expected to grow, with the new projection set between $1.0 billion and $1.05 billion, up from the prior $800 million to $1 billion.
Goldman Sachs concluded that SoFi's stock is likely to experience an uplift following the company's robust performance in its Lending and Financial Services segments, combined with the revised upward financial guidance for the year 2024.
In other recent news, SoFi Technologies has reported a successful third quarter with earnings and revenue surpassing analyst estimates. The fintech company posted adjusted earnings per share of $0.05, outperforming the predicted $0.04, and enjoyed a 30% YoY surge in revenue to $697.1 million, significantly ahead of the forecasted $631.3 million.
SoFi witnessed robust growth across all its business segments, with Financial Services revenue more than doubling YoY to $238.3 million, and both Technology Platform and Lending revenues seeing a 14% increase. The company added over 756,000 new members in Q3, boosting its total member count to nearly 9.4 million, a 35% YoY increase.
In light of these recent developments, SoFi has raised its full-year 2024 revenue guidance to between $2.535 and $2.55 billion, up from its previous outlook of $2.43-$2.47 billion and exceeding analyst expectations of $2.474 billion. The company now anticipates adjusted EBITDA of $640-$645 million for the year.
InvestingPro Insights
SoFi Technologies' recent financial performance aligns with several key metrics and insights from InvestingPro. The company's revenue growth of 30.3% over the last twelve months reflects its strong market position, as highlighted in the earnings report. This growth trajectory is further supported by an InvestingPro Tip suggesting that net income is expected to grow this year, which corresponds with SoFi's updated guidance for higher EPS.
The stock's recent performance has been particularly noteworthy, with InvestingPro data showing a 40.75% price return over the past month and a 62.88% return over the last year. This upward momentum is consistent with Goldman Sachs' prediction of a potential stock uplift following the strong quarterly results.
However, investors should note that SoFi is trading near its 52-week high, with the current price at 98.68% of its 52-week peak. An InvestingPro Tip cautions that the stock's RSI suggests it may be in overbought territory, which could be relevant for those considering entry points.
For a more comprehensive analysis, InvestingPro offers 11 additional tips for SoFi Technologies, providing deeper insights into the company's financial health and market position.
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