Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 5 Jun, 25 | SOFI | Buy | USD 14.01 | USD 14.8 | USD 15.8 | 7 days | Closed |
7.99%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
SoFi Technologies, Inc. provides various financial services in the United States, Latin America, and Canada. It operates through three segments: Lending, Technology Platform, and Financial Services. The company offers lending and financial services and products that allows its members to borrow, save, spend, invest, and protect money. It offers personal loans, student loans, home loans, and related services. The company also operates Galileo, a technology platform that offers services to financial and non-financial institution; and Technisys, a cloud-native digital and core banking platform with financial services customers. In addition, it provides SoFi Money offers checking and savings accounts, debit cards, and cash management products; and SoFi Invest, a mobile-first investment platform that provides access to trading and advisory solutions, such as investing and robo-advisory. Further, the company offers SoFi Credit Card that provides cash backs on every purchase; Sofi Relay, a personal finance management product that allows to track all of their financial accounts comprising credit score and spending behaviors; SoFi Protect, which offers insurance product; SoFi Travel, an application that manages travel search and booking experience; SoFi At Work provides financial benefits to employees, including student loan payments made on their employees' behalf; Lantern Credit, a financial services marketplace platform for seeking alternative products and provide product comparisons; and other lending as a service that offers pre-qualified borrower referrals and sells loans to third-party partner. The company was founded in 2011 and is based in San Francisco, California.
Member Growth: SoFi added a record 800,000 new members in Q1 2025, a 34% YoY increase, reaching 10.9 million members.
Revenue Growth: Adjusted net revenue rose 33% YoY to $770.7 million, reflecting strong top-line momentum
Technology Platform Margin Decline: Contribution margin in the Technology Platform segment fell to 30% from 33% YoY, indicating some margin pressure.
Decline in Net Income: GAAP net income decreased 19% YoY to $71.1 million compared to $88.0 million in Q1 2024.
SoFi faces heightened regulatory, credit, and competitive risks inherent in operating a diversified digital financial services platform, which could impact profitability and sustainable growth as it scales its lending, banking, and technology businesses
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 14.01 | 12.8 | 14.8 | 15.8 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strong Start to 2025 with Record Growth and Innovation: SoFi Technologies commenced 2025 with impressive momentum, underpinned by relentless product innovation and focused brand building. The company reported its highest revenue growth in five quarters, adding a record 800,000 new members (up 34% YoY) and 1.2 million new products (up 35% YoY), reaching 10.9 million members and 15.9 million products, respectively. CEO Anthony Noto highlighted that SoFi’s unique strategy and integrated product architecture continue to deliver sustainable competitive advantage and drive innovation that supports members’ financial well-being.
Robust Financial Performance with Growing Profitability: For Q1 2025, SoFi posted GAAP net revenue of USD 771.8 million, a 20% increase YoY, while adjusted net revenue surged 33% to a record USD 770.7 million. The company recorded its sixth consecutive quarter of GAAP profitability, with net income of USD 71.1 million and diluted EPS of USD 0.06, representing a 200% YoY increase in EPS. Adjusted EBITDA rose 46% YoY to USD 210.3 million, translating to a healthy 27% EBITDA margin. The company’s equity grew by USD 153.4 million to USD 6.7 billion, and tangible book value rose to USD 5.1 billion.
Expansion of Financial Services Segment: SoFi’s Financial Services segment reported a notable 101% YoY increase in net revenue to USD 303.1 million. Net interest income grew 45% to USD 173.2 million, while noninterest income soared 321% to USD 129.9 million. Contribution profit improved significantly by 299% YoY to USD 148.3 million, with contribution margin rising to 49% from 25% a year earlier. The segment’s products grew by 36% YoY to 13.8 million, supported by strong demand for SoFi Money (5.5 million products, up 41%) and Relay (5.1 million products, up 41%).
Progress in Technology Platform: The Technology Platform segment delivered 10% YoY growth in net revenue, reaching USD 103.4 million, with a contribution margin of 30%. The number of enabled client accounts increased by 5% YoY to 158.4 million. SoFi continues to diversify its client base beyond financial services, launching initiatives such as a co-branded debit card with Wyndham Hotels & Resorts and securing a digital banking platform deal with Mercantil Banco in Panama.
Lending Segment Strengthens with Record Loan Originations: The Lending segment generated GAAP net revenue of USD 413.4 million in Q1 2025, a 25% YoY increase, while adjusted net revenue grew 27% to USD 412.3 million. Net interest income rose 35% YoY, driven by a 22% increase in average loan balances. Contribution profit grew to USD 238.9 million (up 15% YoY), with an adjusted contribution margin of 58%. Total loan originations hit a record USD 7.2 billion, with strong growth in home loans (up 54% YoY) and further expansion in the Loan Platform Business.
Improved Credit Quality and Cost Efficiency: SoFi’s credit performance improved, with the personal loan charge-off rate decreasing to 3.31% from 3.37% in Q4 2024, and the student loan charge-off rate dropping to 47 basis points from 62 basis points. Net interest margin expanded sequentially to 6.01%, driven by lower cost of funds. The company’s ability to fund deposits at a cost significantly below warehouse facility rates generated approximately USD 515 million in annualized interest expense savings.
Brand Building and Ecosystem Strengthening: SoFi continued to invest in brand awareness and ecosystem growth, achieving unaided brand awareness of 7%. The inaugural season of TGL presented by SoFi attracted 20 million viewers, and a new partnership with the Country Music Association further strengthened brand visibility. Additionally, the company launched a new fee-based subscription service, SoFi Plus, with strong cross-sell potential, nearly 90% of new subscribers were existing members, and over 40% of new SoFi Plus members adopted a third product within 30 days.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on SoFi Technologies Inc (NASDAQ: SOFI) at the current market price of USD 14.01, as on June 05, 2025 at 10:25 AM PDT.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Financial Services Industry: Credit Services
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | ||
|---|---|---|---|---|---|---|---|---|
| SOFI SoFi Technologies Inc. |
0.45 2.48% | 18.57 | - | 91.74 | 3.75 | 1.48 | ||
| V Visa Inc. Class A |
4.64 1.31% | 358.86 | 31.25 | 25.97 | 16.18 | 13.64 | 16.19 | 23.37 |
| MA Mastercard Inc |
7.72 1.37% | 569.24 | 37.04 | 29.50 | 16.14 | 62.35 | 16.47 | 27.24 |
| AXP American Express Company |
2.52 0.77% | 328.13 | 21.83 | 20.04 | 3.53 | 7.21 | 4.18 | |
| PYPL PayPal Holdings Inc |
0.28 0.37% | 76.59 | 21.96 | 18.69 | 2.93 | 4.56 | 2.86 | 12.64 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is Jun 05,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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