Stock Analysis
SoFi Technologies, Inc. (SOFI)
NASDAQ: SOFI · Financial Technology – Digital Banking & Consumer Lending
Updated
Rated Watchlist, with a fair value of $17.82 against a last close of $16.40 (+8.66% implied upside). Q3 cleared the hurdle the last report set, with the 2026 outlook raised and a first 2027 outlook of $0.90 EPS, but after a 13% one-day gain the shares trade at 18x that outlook with about 11% to the base case, so the Watchlist holds with interest at $14.00-14.50.
- Verdict
- Watchlist
- Fair Value
- $17.82
- Investment Score
- 71.5/100prev 70.2
Technical read (chart only): Confirms as of Downtrend: the results-day gap lifted the price above the 20-day average but not the falling 50 and 200-day averages. Watch for a close above the 50-day, then the 200-day, followed by a higher low.The Watchlist verdict comes from the fundamentals alone. The technical read looks only at the price chart. It does not change the verdict or the score and only guides entry timing.
Investment Scorecard
Composite score 71.5/100 (previous 70.2). Every factor is scored out of 10, ten always being the best outcome, including for risk.
| Factor | Score | Weight | Change | Basis |
|---|---|---|---|---|
| Business Quality | 8/10 | 15% | unchanged | Cross-sell across lending, banking and investing; 1.56 products per member. |
| Financial Strength | 7/10 | 15% | unchanged | 17.0% total capital and $51.3bn of deposits, against a large fair-value loan book. |
| Competitive Advantage | 7/10 | 15% | unchanged | Deposit funding and low-cost cross-sell; the platform lost a large client. |
| Management | 9/10 | 10% | +1 vs last report | Beat and raised again, and issued a funded 2027 outlook early. |
| Growth Potential | 9/10 | 15% | unchanged | 44% revenue growth; 2027 outlook of 27% revenue and about 48% EPS growth. |
| Valuation | 6/10 | 20% | unchanged | 18.2x 2027 outlook and 2.19x tangible book after a 13% one-day gain. |
| Risk (10 = lowest risk) | 4/10 | 10% | +1 vs last report | The mark event has passed; credit and capital use remain the main risks. |
Recent Developments
| Date | Development | Impact |
|---|---|---|
| Q3 2026 results and first 2027 outlook Adjusted net revenue $1.37bn (+44%), net income $241m, adjusted EPS $0.18. 2026 outlook raised to about $5.04bn revenue and $0.61 adjusted EPS; 2027 outlook about $6.4bn revenue and $0.90 adjusted EPS (company), assuming two further rate increases and no new equity. Reading: Removes the event risk behind the last rating and lifts the base case by about $1.50 a share; the 13% one-day gain has already priced most of it. | High | |
| Fair-value marks on the loan book Management said fair-value losses of over $800m were largely offset by about $734m of hedge gains; personal loan discount rate rose to 5.56% from 4.97%. Reading: The hedge programme worked; higher discount rates remain a sensitivity if rates keep rising. | Medium | |
| Loan platform business About $3.8bn of Q3 originations and $153m of revenue; two new partners. Management expects monetization to stay range-bound. Reading: Steady fee income that uses little capital. | Medium | |
| SoFi Earn (SOFIE) tokenized deposit Bank-issued tokenized deposit at a 4.40% variable APY, convertible 1:1 to SoFiUSD, rolling out through November. Reading: Extends the crypto offering; too early and small to move the numbers. | Low |
Key Risks
| Risk | Probability | Severity | Comment |
|---|---|---|---|
| Consumer credit turns | Medium | High | Carries the bear case at $9.00; personal loan charge-offs are falling, card losses rising. |
| Fair-value marks | Medium | Medium | Discount and default assumptions rose in Q3; hedges covered most of it. |
| Capital intensity | Medium | Medium | CET1 fell to 16.9% from 18.7% in a quarter; the 2027 plan assumes no new equity. |
| Rate path | Medium | Medium | Further hikes help margin but hurt refinancing volume and loan values. |
| Valuation after the rally | Medium | Medium | A 13% one-day gain leaves little room if the fourth quarter disappoints. |
| Technology platform | Medium | Low | Lost a large client; contribution profit fell by half. |
Scenario Analysis
| Case | Probability | Fair Value | Outlook |
|---|---|---|---|
| Bull | 25% | $25 | Fourth quarter beats again, credit holds and the 2027 outlook is exceeded; the platform and Plus recover. 2027 adjusted EPS $1.00 at 25x. |
| Base | 52% | $18.27 | 2026 at the new outlook and 2027 slightly below the company's $0.90 on higher discount rates and card losses. 2027 adjusted EPS $0.87 at 21x. |
| Bear | 23% | $9 | Consumer credit turns, charge-offs rise and the 2027 outlook is cut; the shares fall to about 1.2x tangible book. 2027 adjusted EPS $0.60 at 15x. |
The Case
SoFi passed the test the last report set: the 2026 outlook went up, 2027 now has a $0.90 EPS outlook, charge-offs fell and hedges absorbed the fair-value marks. The rating now rests on price: after a 13% gain the shares trade at 18.2x the 2027 outlook and 2.19x tangible book, with about 11% to the $18.27 base case against about 45% to the bear case. The name becomes interesting at $14.00-14.50, or after a fourth quarter that beats again with credit steady.
Archived Reports
Beating The Bull keeps every past version of this report on file. Verdicts and numbers reflect what was known when each one was published.
Informational use only. Not financial advice.