Why SOFI Technologies is Up Big Today

Investing

Published: January 21, 2025 1:01 pm

Last Updated: January 23, 2025 8:43 am

President Trump’s star-studded inauguration Monday appears to have ignited a stock market rally Tuesday, with the Dow up 1% and the S&P 500 up nearly as much. One stock in particular is leaving market averages in the dust however: SoFi Technologies (Nasdaq: SOFI).

In early afternoon trading Tuesday, 12:35 p.m. ET, shares of the online bank and rising fintech star are up a stellar 7.6%.

Key Points

SoFi CEO sees securitization of personal loans as a key growth driver.
Stock analysts predict SoFi will show 14% revenue growth in its earnings report Monday.
A big securitization deal announced last week could result in an earnings beat for SoFi.
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What happened

With the exception of President Trump turning stock markets “green” in general, there doesn’t appear to be much SoFi specific news on the wires today. SoFi’s most recent big news came last Thursday, when the company announced that it closed a $525 million personal loan securitization agreement with global fixed income manager PGIM Fixed Income, after closing a similar and only slightly smaller deal ($350 million) with PGIM in May.

Commenting on his company’s most recent securitization, SoFi CEO Anthony Noto predicted that deals like these, whereby SoFi makes loans and then sells the right to collect on those loans to other investors, will “contribute meaningfully to our durable growth.”

What comes next

Speaking of growth, investors will get their next clue to how fast SoFi is in fact growing on Monday, January 27, when SoFi is scheduled to release its fiscal Q4 2024 earnings report. What should investors expect?

Well, analysts polled by Yahoo! Finance predict 14.2% year over year sales growth for SoFi, with revenues coming in around $678.9 million. Despite the sales growth, though, earnings are expected to be flat year over year at just $0.04 per share.

That’s the bad news. The good news is that SoFi has in fact beat analyst earnings predictions in each of the last four reported quarters. The sudden announcement of a big securitization deal, coming late in the quarter, suggests SoFi stock could be getting ready to beat earnings again on Monday.

At a trailing P/E ratio of 137.5, SoFi stock doesn’t look like much of a bargain right now. Better than expected earnings on Monday could change that for the better, boosting earnings and lowering the P/E. And judging from today’s share price movement, investors are expecting this is exactly what will happen.

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