Investor sentiment around SoFi Technologies Inc (NASDAQ:SOFI) stock was particularly elevated on Jan 29, as the company reported fourth-quarter (Q4) earnings.
The San Francisco-based company reported its first-ever positive EPS and a 3.98% surprise on revenue. However, investor sentiments appear to be particularly driven by the management’s outlook with respect to growth estimates moving forward.
Over the medium term, SoFi management expects 20-25% Revenue CAGR over 2023-2026. This implies a 50% compound growth on Financial services revenue, mid-20% compound growth for its Technology platform’s revenue and mid-teens compound growth for the business’ Lending segment.
Management, led by SoFi CEO Anthony Noto, foresees the business delivering 20-25% EPS growth beyond 2026, reflecting core business strength plus added benefit from any new business lines launched during the 2024-2026 period.
The results along with the bullish outlook did their job well to boost investor sentiment.
See the chart below. SoFi stock’s RSI is still not in the overbought zone (over 70). It may not be the profit-taking opportunity some may be curious about.
Related: Why Is SoFi Technologies Stock Shooting Upwards Monday?
Bullish sentiments for SoFi stock were also seen reflected across platforms such as Reddit and X (formerly, Twitter):
What The Reddit-ors Said
Investors on Reddit hailed “long here”, “love the stock” and “loaded up”
What Twitterati Echoed
Absolutely spot on, instilling confidence and not being too excited about hitting GAAP profits, this company has a long run way, and Noto couldn’t have said it best, they are the company the is going to take the most
— Ryan (@SOLguy2014) January 29, 2024
$SOFI quadrupled the revenue in just 3 years since the end of 2023.Remember this is not the strongest times for US economy.It achieved to grow lending while overall barrowing has been shrinking.Yet, it trades just about 4x sales and 1.5x of the book.Strong buy.
— Oguz O. | 𝕏 Capitalist 💸 (@thexcapitalist) January 29, 2024
The Stock’s Valuation May Take Its Time To Make Sense
While SoFi stock currently trades at really high valuations (153.95 P/E), forward valuations for the stock 2-3 years down the line, are better placed given the anticipated growth in earnings. Earnings growth…
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