SoFi Technologies Q4 earnings poised to beat market expectations (NASDAQ:SOFI)

Online personal financing firm SoFi Technologies (NASDAQ:SOFI), which is set to report its Q4 earnings results on Monday, January 29th, before market open, is expected to exceed expectations, benefitting from falling inflation and a strong U.S. economy.

The consensus EPS Estimate is $0.04 (+180.0% Y/Y) and the consensus Revenue Estimate is $571.51M (+28.9% Y/Y).

The U.S. economy is showing signs of a recovery, as it grew at an annual rate of 5.2% in Q3, and inflation seems to be retreating, which could lead allow consumers to loosen their purse strings a bit.

Russell Investments said on Thursday that it thinks the chances for a recession have dropped below 50%, based on signs from the labor market and the likelihood of more dovish Federal Reserve policy. The firm added that it continues to believe that any recession will only consist of a mild downturn.

The lender and financial app company has also been benefitting from strong new customer growth, and had added more than 717K members in Q3, up 47% Y/Y.

However, the company’s investors had seen a hefty pullback in 2024, giving up their gains from December 2023. The fair value debate has returned to haunt investors, noted SA contributor JR Research.

Shares in the firm are down 22.4% so far this year.

“Despite the pullback, investors should pay attention to SoFi’s price action and improving fundamentals. I assessed that there’s no need to be unduly worried,” JR Research added.

The firm that provides financial products like student loan refinancing, and mortgages, among others, however, was downgraded by Keefe, Bruyette & Woods analyst Michael Perito, to Underperform from Market Perform due in part to recent outperformance that took it to a premium valuation.

“SOFI’s shares remain polarizing, but noise aside, anytime a growth stock is trading at premium valuations with 15-20% downside potential to consensus EBITDA, we believe a more cautious stance is appropriate,” Perito wrote in a note.

Another SA contributor, On The Pulse, remained positive on the stock, and said the fintech’s member growth and potential for GAAP profitability are convincing, leading to a potential breakout in the stock.

The company had reported better than expected Q3 results and also upped its 2023 guidance for revenue and core profit, as it benefitted from new customers.

Over the last 1 year, SOFI has beaten EPS estimates 75% of the time and has beaten revenue estimates 100% of the time

Over the last 3 months, EPS estimates have seen 1 upward revision and 0 downward. Revenue estimates have seen 8 upward revisions and 1 downward.