SoFi Technologies (NASDAQ:SOFI) saw its stock trading lower on Wednesday, despite Wall Street analysts reiterating their ratings after the company reported stronger-than-expected second-quarter financial results on Tuesday.
The fintech firm surpassed revenue and earnings estimates, driven by robust growth in its loan platform business and a significant increase in members and products, leading to Needham raising its price target on the stock.
SoFi reported second-quarter revenue of $858.23 million, beating analyst estimates of $801.49 million. Total revenue was up 44% as fee-based revenue climbed 72%.
Also Read: SoFi Stock Pops As Revenue Soars And CEO Teases Crypto Comeback
Members grew 34% to 11.7 million and products increased 34% year-over-year to 17.1 million. SoFi originated $8.8 billion in loans during the quarter.
SoFi raised its full-year 2025 revenue outlook from a range of $3.24 billion to $3.31 billion to a new target of approximately $3.38 billion versus estimates of $3.27 billion.
In response to the strong results, Needham analyst Kyle Peterson reiterated a Buy rating on SoFi and increased his price forecast from $20 to $25. Conversely, Citizens JMP Securities analyst Devin Ryan maintained a Market Perform rating.
Needham’s Take
Peterson praised SoFi’s second-quarter results, highlighting that revenue and earnings significantly exceeded expectations and Street estimates. The outperformance was driven primarily by strong growth in SoFi’s loan platform business, which continues to benefit from resilient demand in private credit.
SoFi reported GAAP revenue of $854.9 million (+46% Y/Y), beating the analyst’s $805.5 million estimate and the $814.6 million consensus. Adjusted revenue of $858.2 million also exceeded forecasts.
GAAP EPS reached 8 cents, topping the analyst’s 6 cents estimate and consensus. EBITDA reached $249.1 million, well above the projected $207.5 million, thanks to revenue strength and improved operating leverage. Although net interest margin (NIM) declined slightly to 5.86% (versus 5.95% estimated), this was attributed to balance sheet mix shifts.
Following earnings, SoFi raised its fiscal 2025 guidance, now expecting net revenue of ~$3.375 billion (prior: $3.235 billion–$3.310 billion), EBITDA of ~$960 million (prior: $875 million–$895 million), and EPS of 31 cents (prior: 27 cents–28 cents).
Shortly after the report, SoFi completed a $1.5 billion secondary common stock offering at $20.85 per share, which Peterson viewed as opportunistically timed. This capital raise is expected to boost total risk-based capital by ~440 basis points, bringing it to an estimated 18.8%, a level the analyst sees as healthy given SoFi’s asset mix and growth profile. The analyst noted this improved capital position enhances SoFi’s appeal to institutional investors.
Citing stronger fundamentals and improved financial flexibility, Peterson raised his fiscal 2025 and 2026 EPS estimates.
The valuation is based on a sum-of-the-parts model that assigns $18 per share to the lending segment (at 2.5 times expected TBV) and $7 per share to the technology, financial services, and fee-based businesses, valued at ~7 times fiscal 2026 estimated revenue.
This valuation reflects the firm’s view of SoFi as a high-growth FinTech with a compelling long-term outlook. Peterson projected fiscal 2025 revenue of $3.38 billion and GAAP EPS of 31 cents.
Citizens JMP Securities’ Perspective
Ryan described SoFi’s second-quarter fiscal 2025 as another standout quarter. Revenue and earnings were well above expectations, driven by exceptional loan platform performance.
Lending volumes remained strong, with $8.8 billion in originations (up 64% Y/Y), and personal loan originations hitting a record $4.5 billion. The analyst noted improving conditions for student and home loans, driven by waning federal support and expectations of falling interest rates, alongside SoFi’s more sophisticated go-to-market strategies.
The loan platform business (LPB) continues to gain traction, growing volume by over 50% quarter-over-quarter to $2.4 billion. Ryan highlighted LPB as a valuation-enhancing growth engine, with ample capacity and potential expansion into new loan categories.
In the technology segment, SoFi generated $33 million in contribution profit at a 30% margin, and management reiterated its outlook for low double-digit to teens revenue growth in 2025. SoFi expects 10 new clients to generate revenue in the first quarter of 2026, up from zero in the first quarter of 2025, pointing to future momentum.
The analyst also flagged early integration of blockchain and AI. SoFi discussed automating international peer-to-peer money transfers via blockchain, re-launching crypto investing, and exploring asset tokenization and treasury-linked stablecoin revenue.
On the AI side, the firm launched Cash Coach to help users optimize cash, with broader AI-enabled financial guidance expected to deepen customer engagement and asset consolidation over time.
Following strong results, SoFi raised full-year 2025 guidance. Although Ryan had recently downgraded the stock to Market Perform from Market Outperform (citing valuation concerns after a strong run), he acknowledged the quarter was even better than expected.
The analyst remains constructive on SoFi’s long-term optionality, particularly around blockchain, AI, and potential M&A, but sees the risk and reward as balanced at current valuation levels in the low-to-mid $20s.
Their long-term model assumes revenues could triple by 2030, EBITDA margins could expand into the mid-30% range, and EPS could grow to ~$1.75+, supporting a fair value in the mid-$20 range when applying a 25 times multiple and a 13% discount rate.
Ryan projected fiscal 2025 revenue of $3.32 billion and adjusted EPS of 28 cents.
Price Action: SOFI stock is trading lower by 3.37% to $21.67 at last check Wednesday.
Read Next:
Image via Shutterstock
