SoFi Poised for $100 Price After Better Than Expected Financials
I'm backing up the truck for my stock pick of the year.
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Ahead of the opening bell on Friday morning, SoFi Technologies (SOFI) released the firm's fourth quarter financial rules. The results were solid. Better than expected. So was the guidance.
The knee-jerk market reaction was to the upside, and then the pressure came. Are we shaken? This was my stock pick of the year. Is it too late to go with SanDisk (SNDK) ? All kidding aside, we have a situation here and we have to manage it. This is that story.
For the period ended December 31, 2025, SOFI posted an adjusted EPS of $0.13 (GAAP EPS: $0.13) on adjusted revenue of $1.013 (GAAP revenue: $1.025 billion). A $12.2 million adjustment was made to revenue for a positive change in inputs and assumptions related to servicing rights. These top- and bottom-line numbers both beat Wall Street. The EPS print compares to $0.05 for the year-ago comparison, while the revenue number was good for year-over-year growth of 40.3%. In short, SOFI ripped the cover off of the ball.
Adjusted EBITDA was up 60% to $318 million (new record). Fee-based revenue was up 53% to $443 million (new record). Member growth was up 35% to 13.7 million members (a new record). Product growth was up 37% to 20.2 million products (a new record).
Segment Performance
- Financial Services generated total net revenue of $456.7 million (+78%) on 159% growth in non-interest income and 30% growth in net interest income. Contribution profit came to $230.8 million (+101%) on a contribution margin of 51% up from 45%
- Technology Platform generated total net revenue of $122.4 million (+19%) on 19% growth in non-interest income and a negligible amount of net interest income. Contribution profit came to $47.9 million (+49%) on a contribution margin of 39% up from 31%.
- Lending generated total net revenue of $498.7 million (+19%) on a 26% contraction in non-interest income but 29% growth in net interest income. Contribution profit came to $271.7 million (+10%) on a contribution margin of 54% down from 59%.
Guidance
For the current quarter, SOFI's guidance for adjusted net revenue met expectations for $1.04 billion and guidance for adjusted EPS met expectations for $0.12. Perhaps that is at least part of the reason for this morning's market beatdown.
For the full year, SOFI is guiding toward adjusted net revenue of $4.66 billion, which is well above the $4.52 billion that Wall Street had in mind. The firm also sees adjusted EBITDA of $1.6 billion, above the $1.54 billion that Wall Street expected and an adjusted EPS of $0.60. That beat the consensus view of $0.58.
Thoughts
There is absolutely nothing in this report or in the guidance issued that would provoke me to sell any portion of my long position in SOFI. The firm is executing at an elite level under CEO Anthony Noto. Let's go to the chart:
Readers will see that the stock broke below the support line for the recent basing period of consolidation that had developed coming out of a double-top pattern of bearish reversal late last year. Relative strength is relatively weak. The daily MACD is postured quite bearishly as well.
What am I doing? It's my stock of the year. I'm going to defend it. After this article becomes public information, I will be backing up the truck at the 200-day SMA. That's where the pros will make their stand if they are going to. My target price for now remains $36, at least until I see a new technical pattern that I recognize. I still see this as a $100 stock long-term.
At the time of publication, Guilfoyle was long SOFI equity.
