TLDR
- SoFi reported 44% revenue growth to $858 million in Q2 with earnings jumping 700% to $0.08 per share
- Company added record 850,000 new members in Q2, bringing total membership to 11.7 million
- Management raised 2025 guidance with revenue expected at $3.38 billion and net income around $370 million
- Stock trades at premium valuation with P/E ratio of 52 compared to S&P 500 average of 30
- Analysts maintain mixed outlook with consensus “Hold” rating and average price target of $19.35
SoFi Technologies delivered another strong quarter that exceeded analyst expectations across key metrics. The financial services company reported second-quarter revenue of $858 million, representing a 44% increase from the same period last year.
Earnings per share reached $0.08, beating the consensus estimate of $0.06 by two cents. This marked a dramatic 700% increase from the prior year quarter when the company earned just $0.01 per share.
The member growth story continues to impress investors and analysts. SoFi added a record 850,000 new members during the quarter, representing a 34% increase year-over-year. Total membership now stands at 11.7 million across the platform.
Fee-based revenue provided a major boost to results. This segment grew 72% to $378 million as existing members utilized more services across SoFi’s expanded product suite.
Management Raises Full-Year Outlook
The strong quarterly performance prompted management to increase their 2025 guidance across multiple metrics. Revenue expectations now sit at approximately $3.38 billion, up from the previous estimate of $3.27 billion.
Net income projections also received an upward revision. Management now expects around $370 million in net income for the full year, compared to the prior forecast of $325 million.
Member acquisition targets also got a boost. The company expects to add at least 3 million new members in 2025, representing a 30% increase from 2024 levels.
Credit Quality Metrics Show Improvement
SoFi’s lending business continues to demonstrate healthy credit metrics despite concerns about potential economic headwinds. The annualized charge-off rate actually decreased during Q2 from 3.31% to 2.83%.
Personal loan delinquency rates also improved for the fifth consecutive quarter. The 90-day delinquency rate dropped to 0.42%, indicating borrowers remain current on their obligations.
These credit trends provide some comfort given the broader economic uncertainty and recent job market softening.
Analyst Views Remain Mixed
Wall Street analysts have updated their price targets following the earnings report but maintain cautious optimism. UBS raised its target to $15.50 while Needham increased theirs to $25.00.
Mizuho set a $26.00 price target with an “outperform” rating. However, the consensus rating remains at “Hold” with an average price target of $19.35.
One analyst has a Strong Buy rating, six rate it a Buy, eleven have Hold ratings, and three maintain Sell recommendations.
Valuation Concerns Persist
The stock’s impressive run has created valuation challenges for new investors. SoFi currently trades at a P/E ratio of 52, well above the S&P 500’s average multiple of around 30.
This premium valuation reflects investor optimism about the company’s growth trajectory. However, it also means the stock has less margin for error if economic conditions deteriorate.
Recent economic data showing weaker job growth could pose risks to SoFi’s business model. The company added just 73,000 jobs in July, with substantial downward revisions to previous months.
Recent Trading Activity
Shares rose 3.1% to close at $25.74 in recent trading with volume of approximately 19.5 million shares. This represented a 68% decline from the average daily volume of 61 million shares.
The stock has traded in a 52-week range between $6.75 and $26.61. Current market capitalization stands at approximately $30.6 billion.
Several institutional investors have adjusted their positions recently, with hedge funds and institutional investors now owning 38.43% of outstanding shares.
SoFi’s leadership team has been active in the market with some insider selling activity. CTO Jeremy Rishel sold 66,847 shares at $15.55 each in June, while EVP Kelli Keough sold 10,578 shares at $22.13 each in August.
