SoFi Technologies Inc has experienced a significant boost in its stock value, rising over 21% after achieving profitability for the first time. This achievement aligns with the CEO Anthony Noto’s goal of transforming the company into a top 10 financial institution.
At the time of this publication, SoFi Technologies Inc stock (SOFI) has witnessed a surge.
SoFi Technologies Inc
Current Price: $9.24
Change : +1.62
Change (%): (21.26%)
Volume: 107.0M
Source: Tomorrow Events Market Data
The reported fourth-quarter net income of $48 million marked the company’s first profit since going public in 2021, exceeding analysts’ expectations. The earnings per share of 2 cents also surpassed estimates, reflecting a positive trend compared to the 5-cent loss a year earlier.
SoFi’s leadership, including Noto, emphasizes a transition year in 2024, with the technology and financial-services segments driving growth rather than focusing on the lending operation, a traditional business for SoFi.
Noto mentioned in an interview that the lending business is not planned to grow, as there is no need to expand assets rapidly in that area. The company’s strategy appears to be centered around diversifying its revenue streams beyond lending.
The financial results indicate a shift towards technology and financial services, with fourth-quarter adjusted net revenue of $594.2 million beating analyst estimates. The company reported significant growth in total deposits, allowing it to reduce reliance on more expensive funding sources.
Looking ahead, SoFi projects a full-year net income in the range of $95 million to $105 million, with earnings per share between 7 cents and 8 cents. The outlook considers the possibility of four interest rate cuts, and the company expects 20% to 25% EPS growth beyond 2026, reflecting both core business growth and new business lines launched in the 2024 to 2026 period.
Notably, SoFi has expanded its offerings beyond student-loan refinancing and entered the crypto space in 2019, but it announced its exit from that sector in November due to regulatory pressures. The recent announcement about allowing customers to invest in alternative investment funds, mutual funds, and money market funds through its SoFi Invest platform indicates a continued diversification of its services.
SoFi Technologies’ remarkable achievement of reaching profitability for the first time has not only exceeded market expectations but also ignited a substantial stock boost, showcasing investors’ confidence and signaling a new era of growth for the fintech company. Investors have responded positively to these developments, with the company’s shares experiencing a significant jump in value, reaching $8.96 and touching $9.20.
