SoFi Technologies: A Gift Below $5 After Q1 Earnings

Seeking Alpha2023-05-04

SummarySoFi beat top and bottom line estimates for the first-quarter on Monday. Yet, shares sold off.SoFi maintained considerable acquisition momentum in terms of new accounts and raised guidance for ...

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miker9110
2023-05-04
miker9110
O
mavis88
2023-05-04
mavis88
Buy buy buy
Ahlec
2023-05-04
Ahlec
Student debt issue lingers...

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Yet, shares sold off.SoFi maintained considerable acquisition momentum in terms of new accounts and raised guidance for ...</p>\n\n<a href=\"https://seekingalpha.com/article/4599237-sofi-technologies-a-gift-below-5-after-q1-earnings\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>SoFi Technologies: A Gift Below $5 After Q1 Earnings</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSoFi Technologies: A Gift Below $5 After Q1 Earnings\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-05-04 15:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4599237-sofi-technologies-a-gift-below-5-after-q1-earnings><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummarySoFi beat top and bottom line estimates for the first-quarter on Monday. Yet, shares sold off.SoFi maintained considerable acquisition momentum in terms of new accounts and raised guidance for ...</p>\n\n<a href=\"https://seekingalpha.com/article/4599237-sofi-technologies-a-gift-below-5-after-q1-earnings\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":null,"symbol_name":null,"start_time":0,"source_url":"https://seekingalpha.com/article/4599237-sofi-technologies-a-gift-below-5-after-q1-earnings","article_id":"2332944371","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2332944371","pubTimestamp":1683183917,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"SummarySoFi beat top and bottom line estimates for the first-quarter on Monday. Yet, shares sold off","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"SoFi Technologies：第一季度收益后低于5美元的礼物","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SOFI":1},"content_text":"SummarySoFi beat top and bottom line estimates for the first-quarter on Monday. Yet, shares sold off.SoFi maintained considerable acquisition momentum in terms of new accounts and raised guidance for FY 2023.The market overreacts to the FinTech's Q1 2023 earnings sheet, I am buying more.ViorikaShares of SoFi Technologies (NASDAQ:SOFI) crashed 12% after the company reported earnings for the first-quarter on Monday. I believe the drop is totally undeserved considering that SoFi continues to show extraordinary acquisition momentum in terms of new accounts and that the FinTech company raised its guidance for FY 2023. Investors are most likely overreacting to the company's Q1'23 earnings sheet... which creates a buying opportunity for investors that can handle volatility and occasional stock sell-offs. As the company continues to see a strong ramp in revenues and moves towards GAAP profitability, the long term value proposition is favorable. SOFI stock, while not totally cheap, is a top FinTech bet on the creation of a one-stop personal finance brand!SoFi delivers strong Q1’23 performance relative to estimatesSoFi beat top and bottom line estimates for the first-quarter on Monday as the FinTech continued to execute on its growth plan and welcomed hundreds of thousands of new members to its SoFi-branded ecosystem. SoFi beat the top line estimate by $23M while EPS came in $0.04 per-share better than expected.Source: SoFiStrong acquisition momentumIn my recent work on SoFi I highlighted that I continue to expect rapid member account growth for the company in the next few years as the FinTech continues to roll out new financial services and lending products and builds a one-stop personal finance brand. SoFi acquired 480 thousand new members to its ecosystem in the fourth-quarter and although growth slowed quarter over quarter, the company added a significant number of new accounts to its platform in Q1'23 as well: SoFi acquired 433 thousand new members in the first-quarter which brought the total member count to 5.66M, showing 46% year over year growth.SoFi's acquisition growth has now slowed seven quarters in a row, but Q1'23 still saw the fourth-largest account acquisition number in the company’s history. Due to this momentum, I continue to expect that SoFi could add approximately 100 thousand new accounts each month to its ecosystem in the next few years and I reaffirm my expectation that SoFi could grow its member base to 6.4-6.5M by the end of the year.Source: SoFiMassively improved profit pictureSoFi achieved a new quarterly revenue record in Q1'23 with total adjusted net revenues of $460M, showing 43% year over year growth. This growth was driven by two factors, chiefly: new member sign-ups that resulted in incremental revenue growth as well as a massive expansion of the company's product suite, especially in financial services. Financial services are SoFi's growth driver and grew at twice the rate as SoFi's traditional lending products (51% vs. 24%).What also greatly improved in the first-quarter was SoFi's EBITDA performance which is key to an upside revaluation for the FinTech's shares, in my opinion. During the pandemic investors happily valued fast-growing FinTechs at high revenue multipliers, but with growth slowing after COVID-19, investors want to see a clear path toward profitability... which SoFi is increasingly able to deliver: the firm generated $76M in adjusted EBITDA in Q1'23, showing 744% year over year growth. This massive ramp in EBITDA is the direct result of the FinTech's acquisition success and it makes it likely that investors could see positive GAAP earnings within the next 1-2 years.Source: SoFiWhile SoFi still generated a net loss of $34.4M in Q1'23, losses are narrowing and the black zero is now firmly in reach. In the year-earlier period, SoFi generated a loss of $110.4M. Reaching GAAP profitability would not only be a milestone event for the FinTech, but it could be a catalyst to power SoFi's shares into a new up-leg as well. I believe SoFi could achieve GAAP profitability in FY 2024 if the company can sustain its account acquisition momentum.Raised guidance for FY 2023SoFi raised its net revenue and adjusted EBITDA guidance for FY 2023: the company now expects $1,955-2,020M in adjusted net revenue and $268-288M in adjusted EBITDA, implying mid-point raises of 1.3% in both metrics. The raised outlook conveys management's confidence in SoFi's business trajectory, expansion plan and is especially satisfying considering that the U.S. financial system last month experienced major stress.Source: SoFiSoFi’s valuationSoFi has seen a massive downside valuation adjustment after the pandemic which is when investors realized that the company could not sustain 100% annual account growth rates. While it is true that SoFi is now growing at about half the rate as it did during the pandemic, SoFi is still going to grow rapidly going forward. Analysts currently project that SoFi could achieve 29% top line growth in FY 2023 and 23% growth in FY 2024. The FY 2024 revenue estimate implies a forward price-to-sales ratio of 1.9X... which sits well below the 1-year average P/S ratio of 2.6X.Data by YChartsRisks with SoFiThe risks with a growth-focused FinTech company are obvious: moderating top line and member account growth rates are key challenges for SoFi in FY 2023 and beyond. The company has seen a slowdown in its post-pandemic growth, but as long as members continue to gravitate towards the SoFi brand, I believe the risks with SoFi are not excessive. What would change my mind about SoFi is if the company saw a serious decline in its account and financial services product growth rates.Final thoughtsThe market is overreacting to SoFi’s first-quarter results and I am buying the drop. SoFi's results were solid overall: the FinTech beat top and bottom line estimates, raised its guidance for FY 2023 and maintained strong account acquisition momentum. Additionally, SoFi is slowly moving towards GAAP profitability. Achieving profitability would be a milestone event for this fast-growing FinTech company and I believe that shares have considerable re-valuation potential once investors see that the company is not only growing rapidly, but also profitable!This article is written by The Asian Investor for reference only. Please note the risks.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9947253183,"gmtCreate":1683214759342,"gmtModify":1683214762795,"author":{"id":"3568440341211251","authorId":"3568440341211251","name":"miker9110","avatar":"https://community-static.tradeup.com/news/9f28ba582b05ac94b2b60a5b9a550a10","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3568440341211251","authorIdStr":"3568440341211251"},"htmlText":"O","listText":"O","text":"O","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9947253183","repostId":2332944371,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9947286616,"gmtCreate":1683193535435,"gmtModify":1683193539469,"author":{"id":"4127625745778862","authorId":"4127625745778862","name":"mavis88","avatar":"https://community-static.tradeup.com/news/02b482b2c40d0e87999261caefcc5e95","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":3,"crmLevelSwitch":1,"idStr":"4127625745778862","authorIdStr":"4127625745778862"},"htmlText":"Buy buy buy","listText":"Buy buy buy","text":"Buy buy buy","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9947286616","repostId":2332944371,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9947217835,"gmtCreate":1683186487728,"gmtModify":1683186492097,"author":{"id":"4091753544363040","authorId":"4091753544363040","name":"Ahlec","avatar":"https://static.tigerbbs.com/81afb03fdd19de870e28208208ff7909","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"4091753544363040","authorIdStr":"4091753544363040"},"htmlText":"Student debt issue lingers...","listText":"Student debt issue lingers...","text":"Student debt issue lingers...","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9947217835","repostId":2332944371,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":8,"commentSize":3,"repostSize":2,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.30.2","shortVersion":"4.30.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2332944371"}