SoFi Technologies Stock News and Forecast: SOFI stock soars as investors cheer earnings guidance

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SOFI stock soars in afterhours on Tuesday as earnings boost sentiment.
SOFI had been beaten down, so expectations were low ahead of the release.
SOFI beat on EPS and revenue and issued strong guidance.

SoFi Technologies (SOFI) is an online personal finance company that has garnered quite a bit of investor attention lately. This has been due to its volatility from retail interest and speculation that the company would get its banking license. The company recently announced the acquisition of cloud-based technology finance firm Technics. The big interest though has been the pending banking license allowing SOFI to offer full checking and traditional bank services. The company is expected to receive the bank charter in the first half of the year. Approval has already been granted as of January 18.

SOFI Stock News

SOFI revenue came in at $279.9 million, which was just ahead of forecasts for $279.3 million. Earnings per share beat estimates by two cents with SOFI reporting an EPS loss of $0.15. The company also guided next quarter revenue in the range of $280 to $285 million, which was less than analyst expectations, but the yearly figure was stronger than expected. SOFI guided full-year revenue at $1.57 billion versus estimates for $1.45 billion.

SOFI said full-year earnings before interest tax, depreciation and amortization (EBITDA) will be $180 million versus Wall Street forecasts closer to $157 million. We expect a slew of analyst upgrades and at the very least price target increases from Wall Street firms to follow the earnings release. Currently, 11 Wall Street analysts issue recommendations on SOFI, eight have a buy rating, and the average price target is $18.50. SOFI stock had fallen sharply this year as it is a high growth technology name, so the risk-reward was skewed to the upside ahead of these results. Bad news had been largely priced in, so this beat and positive outlook is well rewarded and the stock is up 13% in Wednesday’s pre-market.

SOFI Stock Forecast

SoFi stock has bounced impressively in the afterhours and again in the premarket on Wednesday, but this merely gets the stock back to recent levels from last week. When investing it is always important to consider the macro backdrop. Growth stocks and tech names will continue to suffer now that interest rates and inflation are rising. Coupled with a slowdown in economic growth likely from sanctions, this makes life increasingly difficult for a stock like SOFI.

There is a large amount of volume from $14 to $16, meaning any gains will likely get stuck here. To push through, the Russia-Ukraine conflict will need to end alongside sanctions. Otherwise, we are in a bear market for equities. We remain in a classic downtrend until $16 is broken.