4 SoFi Technologies Analysts On Q3 Earnings In 'Challenging Interest Rate Environment'

Zinger Key Points
  • SoFi reported “superb” adjusted EBITDA and guided to ~$45mn at the mid-point for Q4, one analyst said.
  • There are concerns around loan origination and sale fees, another analyst stated.
4 SoFi Technologies Analysts On Q3 Earnings In 'Challenging Interest Rate Environment'

SoFi Technologies Inc SOFI Tuesday reported higher-than-expected third-quarter earnings. Here's the latest from the Street on the lending stock.

Keefe, Bruyette & Woods On SoFi Technologies

Analyst Michael Perito reaffirmed a Market Perform rating with a price target of $6.

There were “clearly some earnings tailwinds” reflecting in the company’s quarterly results, Perito said in a note. He added, however, that there are “also some questions around loan origination and sale fees, in addition to the lower technology revenue / profit run-rate.”

Mizuho Securities On SoFi Technologies

Analyst Dan Dolev reiterated a Buy rating and a price target of $8.

“Despite the challenging interest rate environment, SOFI just reported outstanding 3Q 2022 results marked by student loan origination volumes returning to Q/Q growth, coupled with very strong new member and new product adds,” Dolev wrote in a note.

The highlight of the results was the “superb adj. EBITDA figure” and its guidance implies “yet another ~$45mn of adj. EBITDA in 4Q at the mid-point,” both of which “should be very well-received by investors,” the analyst said. “We expect a very positive stock reaction,” he added.

Check out other analyst stock ratings.

Morgan Stanley On SoFi Technologies

Analyst Jeffrey Adelson reiterated an Equal-Weight rating, while reducing the price target from $7.50 to $7.

The company’s earnings and revenue beat was driven by “continued strength in gain on sale, specifically with SOFI's hedges continuing to work,” along with “NIM expansion on faster loan growth and deposit growth” and strong expense discipline in the Lending segment, Adelson said in a note.

He added, however, that the full-year revenue guidance was raised by only $9 million, although the quarterly beat was around $30 million, while loan growth was boosted by the repurchase of more than $1 billion of loans back from one of the company’s whole loan buyers, “which we do not expect to repeat.”

The analyst further stated that this “raises some questions over industry's capacity to fully absorb loan sales.”

Credit Suisse On SoFi Technologies

Analyst Timothy Chiodo reaffirmed a Neutral rating, while reducing the price target from $8.50 to $8.

“Once again, the largest portion of the beat came via the Lending segment (which posted record personal loan originations and strong gain on sale margins), alongside a beat in the Financial Services segment (which demonstrated encouraging trends in direct deposit traction) and relatively in-line Galileo revenue (announced ten new client signings, additional B2B wins, and expansion into Latin America),” Chiodo wrote.

“We continue to believe SoFi is relatively well positioned among US Neobanks (a market in which we expect to see both consolidation and re-bundling of services),” he added.

SOFI Price Action: Shares of SoFi Technologies were down 8.99% at $5.22 midday Wednesday.

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Posted In: Bruyette & WoodsCredit SuisseDan DolevJeffrey AdelsonKeefeMichael PeritoMizuho SecuritiesMorgan StanleyTimothy ChiodoAnalyst ColorEarningsNewsPrice TargetReiterationTop StoriesAnalyst RatingsMoversTrading Ideas