SoFi: Don't Buy now ? Maybe end May ?
Q1 2024 Earnings
On Mon, 29 Apr 2024, $SoFi Technologies Inc.(SOFI)$ reported its Q1 2024 results.
They did not disappoint: (see below)
Earnings per share: $0.02 adjusted vs. $0.01 expected.
Revenue (GAAP): gained +37% YoY at $645 million vs $472 million (2023), vs $556 million expected.
2nd Quarter reporting Profits.
Q2 2024 Forecast.
Earnings per share: revised higher at between $0.08 & $0.09 vs $0.08 expected.
Revenue: estimated between $555 to $565 million, vs $581 million expected.
As a result of having an outlook “lower” than Wall Street’s, it suffered the same fate as $Intel(INTC)$.
SoFi stock price fell by -10.48% to closse at $7.05 per share.
Earnings Analysis
SoFi’s revenue stream comes from 3 Components:
(1) Lending:
This remains SoFi's largest segment. (see below)
All 3 loans (personal, student & home) gained momentum YoY.
However, its contribution is decreasing as a percentage of total revenue.
This is “good” strategy for the bank as it tries to rebalance and achieve a most sustainable revenue mix over time.
(2) Technology Platform:
This segment saw significant growth (+21% YoY) with revenue contribution of xx million.
It now contributes a healthy portion of the overall revenue pie.
(3) Financial Services:
This segment also experienced growth and offers recurring fee income.
Customers’ Growth
Another aspects to consider is the bank’s customer base. (see below)
SoFi has been able to grow its customer base at a regular +44% quarterly.
It is not an easy feat to achieve, considering intense competition in the Financial services sector.
By leveraging on technology, SoFi is able to draw its customer closer as it continues to provide a one-stop solution to it customers.
Technical Analysis.
As a result of its -10.48% dipped on Mon, 29 Apr 2024:
SoFi’s stock price is trending below its 20-day, 50-day and 200-day moving averages.
This implies there will be a lot of “pressure” on stock price in the near term.
RSI currently stands at 43, it is neither oversold nor overbought.
Price resistance will be $7.89, $10.32 and $9.95 in the short, mid and long term respectively (see above).
My viewpoint: (mine & mine only)
I still think market has overreacted to SoFi’s Q2 2024 outlook.
Regardless, my eyes remain glued to SoFi’s pivot from Loans (especially student’s) to “mitigate” its risk exposure.
As long as Q2 2024 reports a profit in 3 months’ time (again) , all would have been forgotten when the time comes.
Looking at its stock price objectively, it has fallen -29% YTD (as of Fri, 26 Apr 2024).
However, based on “past 12 months” performance, it still has a +29% gain.
To Buy or Not To Buy?
SoFi’s $7.05 per share (as of 29 Apr 2024) looks like an attractive entry.
Still, I would sit out because today (30 Apr) and tomorrow (01 May) is the FOMC meeting.
Quite certain that interest will remain status quo.
It is what Mr. Powell has to say that will be keeping everyone on high alert..
Should Mr Powell adopts a hawkish tone (and warns of further interest hike) during 01 May 2024 afternoon press conference, market will react adversely.
Separately, looking at SoFi’s past price movements - it was “low” in May 2022 & May 2023, (see above)
Not to mention, its slanted towards a “sell” volume.
Looks like the investment lingo - “Sell in May and go away” - seems to be “true”, after all. Ha, ha, ha.
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Do you think SoFi will continue to consolidate in the near term; epecially 30 Apr & 01 May ?
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he biggest problem with SOFI stock is the CEO cares very little about the stock price Noto is strictly interested with his vision of running the company If that vision translates into a higher stock price fine If not so be it
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Hmmm, why has this board suddenly gotten so quiet? What happened to our resident bashers?
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