SoFi Earnings: Growth Accelerates on Strong Loan Demand and Increased Usership

Key Morningstar Metrics for SoFi Technologies

• Fair Value Estimate: $16.00
• Morningstar Rating: ★
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: Very High

What We Thought of SoFi Technologies’ Earnings

SoFi Technologies SOFI reported impressive third-quarter earnings, with strong results across the company. Adjusted net revenue increased 38% from last year to $950 million, while earnings per share rose to $0.11 from $0.05. These results translate to a return on tangible equity of 8.5%.

Why it matters: SoFi’s shares are trading down modestly on the earnings release, though we would attribute this entirely to the high expectations implied by the current price. Continued strength in SoFi’s loan platform business and better results from its mortgage lending have raised our growth expectations for the firm.

• While we still see SoFi’s loan platform business as less reliable, given its reliance on external investors, demand for SoFi’s loans has been voracious. Loan platform revenue increased to $164.9 million from $55.6 million last year, and with SoFi expanding its credit box, we see room for further growth here.
• Still a small part of its lending segment, SoFi’s mortgage lending business has been showing stronger trends, with its mortgage origination rising 93% from last year. We see this as a significant long-term opportunity given SoFi’s limited market penetration.

The bottom line: As we incorporate these results, we expect to increase our $16 fair value estimate for no-moat-rated SoFi by 10%-15%. Despite the increase, we see the shares as overvalued after their dramatic performance over the last year.

• We think the market is extrapolating too much growth from SoFi’s recent performance, which includes the launch of its loan platform segment. While this business has materially outperformed our initial expectations, we expect growth to slow over time.

Key stats: With the earnings release, SoFi also increased its 2025 guidance. The firm now expects revenue to grow 36% to $3.54 billion, up from $3.38 billion. SoFi also expects GAAP earnings per share of $0.37, in line with our expectations.