Bulls See the Post-Earnings Pullback in SoFi Technologies Stock as a Buying Opportunity – TipRanks

Story Highlights

SoFi Technologies stock has declined over the past month due to subdued 2025 profitability guidance. However, SOFI bulls see this correction in the stock as a good entry opportunity.

Fintech and digital bank SoFi Technologies (SOFI) has seen its stock decline by 18% over the past month, mainly due to investors’ concerns about the company’s soft 2025 profit guidance that overshadowed a solid Q4 2024 earnings report. Despite this recent drop, SOFI stock is still up about 81% over the past year. Bulls see the pullback in SoFi Technologies stock as an attractive opportunity to build a position in this rapidly growing fintech.

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SoFi Is Expanding at an Impressive Pace

SoFi Technologies delivered solid performance in 2024, growing its member base by 34% to 10.1 million members. Moreover, the company continued to expand its product offerings, with total products increasing 32% to 11.1 million.

The company’s strategy to shift towards capital-light, higher ROE (return on equity), fee-based revenue streams also helped in boosting overall business. In this context, it is worth noting that revenue from SOFI’s Financial Services and Tech Platform businesses grew 52% in Q4 2024 and accounted for 49% of the overall revenue compared to 40% in the prior-year quarter.

Interestingly, at the recently held Bank of America Financial Services Conference, CEO Anthony Noto said that the company has raised its 2003 to 2026 revenue CAGR (compound annual growth rate) target to more than 25% from the previous estimate of 20% to 25%, given the massive growth opportunities. SOFI is also optimistic about delivering 20% to 30% ROE (return on equity) as the business continues to expand.

SOFI Bulls Confident About Continued Growth

Recently, DBS analyst Ken Shih reiterated a Buy rating on SOFI stock and increased the price target to $18.50 from $13. The five-star analyst noted the impressive Q4 2024 performance and continued improvement in delinquencies, with the 90-day+ personal loan delinquency rate improving by two basis points to 0.55%. Despite the short-term profit guidance miss, Shih believes that the current pullback in SOFI stock offers an attractive entry opportunity, given the impressive long-term growth outlook. Shih also expects the shift towards loan platform business and the potential to enhance the monetization of SoFi Invest to drive improvement in profitability.

Likewise, Mizuho analyst Dan Dolev raised the price target on SoFi Technologies stock to $20 from $16 and reaffirmed a Buy rating. The four-star analyst noted that SOFI stock declined following the results, as the 2025 EBITDA outlook fell short of expectations. That said, Dolev believes that the company’s solid fundamentals and an upbeat 2025/medium-term revenue guidance support a higher price target.

Dolev believes that the company’s increased investment in the business should enhance its strong customer acquisition streak. He contended that many of the arguments of SOFI bears are in the rearview mirror. For instance, Dolev highlighted a continued decline in NCOs (Net Charge Offs) even after adjusting for delinquent loan sales.

Is SOFI Stock a Buy, Sell, or Hold?

While analysts at DBS and Mizuho are bullish on SoFi Technologies stock, Wall Street has a Hold consensus rating based on six Buys, six Holds, and four Sell recommendations. The average SOFI stock price target of $14.64 implies that the stock is fully priced at the current levels.

Conclusion

While several analysts are sidelined and bearish on SOFI stock due to the soft near-term profitability outlook and valuation concerns, bulls remain upbeat about the company’s solid execution and robust growth opportunities.

See more SOFI analyst ratings

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