Should You Buy SoFi Stock Before Wednesday?

Hey everyone and welcome back to another video for today. So, as always, we'll do a quick SoFi earnings preview plus also predictions. We always do predictions and see how close we can be. Last quarter were very, very close. We're usually a little bit under. Some of the numbers were a little bit over, such as the tech platform huge impact last quarter. I just estimates for this one. We'll also have a look at the DCF again, which is available to all of you for free down in the description and in the pin comment. No email, no sign up, no nothing. Just the Google Drive, right click, copy, and it's yours. You can play around with it and all of the others DCFS available to you as well for free. So, SoFi, tricky situation. Why is it a tricky situation, you ask? Well, first of all, 3 months ago, we had a good quarter. Same guidance, but the assumptions got worse. Guess what happens on the same day that SOFA reports their quarterly figures this week? FOMC meeting and soi reports before the market opens which means start of the day. So they're going to give us the numbers for the quarter. They're going to tell us whether or not they are updating their guidance whether it's on the upside or downside. They are going to tell us the assumptions as well. Now all of that is great and could be great. Stock could be up although don't get your hopes up. We know what has happened over the past couple of quarters. But then a couple of hours later, we have Kevin Walsh. And whatever he's going to say on that same day will of course impact a stock like SoFi. Could maybe impact Sofi's assumptions for the year. Which is why I do think that they're going to play it quite safe. And by safe, I mean they won't touch guidance just yet. They might also even tell us something more about their assumptions, maybe being a little more bearish, which would actually translate into the guidance staying the same, being quite bullish. We'll actually have a look at one quote from a couple of weeks ago. And so when we look at SoFi right now, it's not a good year, right? Nobody can tell you it's a good year for the stock. For the business, things have done quite well, but for the stock itself, it's down 39% year to date. Over the past 12 months, it's now down 20%. It's a company worth $21 billion. Fast growing company. Profitability is improving as well. Forward PE is quite low. Trailling P is also low purely because of the growth, right? The bottom line growth for this business that's moving quite rapidly. Now, you might say, oh yeah, but fine, but it doesn't matter. It's a bank, etc. Again, all of this nonsense. It's a bank. A bank doesn't grow this quickly, right? The bank doesn't see this acceleration. 37.8% growth for revenue. If we look at quarterly, we've seen a small acceleration, 41% year-over-year growth. The last four quarters, 43, 37, 37, 41% year-over-year growth. This is a fast growing business. Look at what the market is expecting so far to report. They're looking for $1.11 billion, which is approximately what the company itself projected. With regards to EPS, I believe it's around 11 cents or so. Yeah, 11 cents. And then we're going to look at Abida and then I'll share my own predictions. $332.4 million for the quarter. Now, these are my predictions for the quarter. I think they'll add around again a million members this quarter. Acquisition cost $325 which is a little bit higher than last quarter. Galileo revenue is a tiny bit higher than last quarter. 78 million should improve in the back half of this year to reach their own target. Country, I think it was $325 million or so. So I'm at 78. If it's above 80, that's a very good surprise. As for adjusted revenue, I do think they're going to beat their estimate. I'm around $1.16 billion with adjusted ebida of around $375 million and EPS close to 13 cents could be a little bit lower in the 12 cents or so, but I'll say here close to 13 cents with net income at around $175 million. Now, how did I reach all of these numbers? Let me walk you through all of it. Of course, if you enjoy this type of videos, hit all the buttons. Would really appreciate that. Want to support me even further. Do check out the link down in the description and in the pin comment to the top 10 best stocks to buy now or go to full.com/gotchinvestor. Thank you very much. So a couple of weeks ago during the JP Morgan annual global technology conference, they said the following thing with regards to the environment and guidance. There's always a difference between expectations etc. We had 41% revenue growth at over a billion dollars. By the way, now every single quarter is probably going to be above a billion dollars. And that's a billion dollars of cash revenue. We had really strong profitability. We've grown our tangible book value by 100% since 2023. It's been great environment. Well, not that great to be honest. And we don't really see it changing. The one thing that is more challenging than we anticipated for this year is rates. We came into the year thinking rates would come down at least twice. Now we're factoring in no rate cuts, which is why we left our guidance for the full year despite beating where it was. And that's why I say I do think that they might say now that they're factoring in a rate hike, but still but still they're keeping their own guidance in place, which in my opinion would be bullish. I think if rates, they said, I think if rates do come down unexpectedly, we'll have a huge tailwind in student loan refinancing, it's already up 100% on its own. rate cuts would only accelerate it even further. And so currently guidance for the year is 30% revenue growth, 52% adjusted EIDA, 72% growth net income, and 54% diluted earnings per share. Now that's 60 cents for the year. I'm saying 13 right now. I believe we had 11 last quarter. And so yeah, things will need to accelerate from here on out in order to reach that number. For Q2, they said adjusted net revenue growth of approximately 30% from Q2, adjusted dividend margin of approximately 30% and adjusted net income margin of approximately 12 to 13%. Now, of course, some people were already asking last quarter and then there were some stress about our borrowers defaulting and they showed us this nice slide here. The net charge off charge off rate 4.4% that's down 40 basis points year-over-year. The safety net here so model assumes 7 to 8% losses. They're very well positioned and as always they are quite prudent. So with high interest rates, we've talked about this. We've talked about the positives for businesses like a SoFi, like a Robin Hood, right? It's not just a headwind. So for example here, if we look at total net interest income, we've seen a slight acceleration here close to 39% year-over-year growth. generate 610, let's call it $93 million. They told us we continue to expect a healthy net interest margin above 5% for the foreseeable future. As for the lending part was doing quite well. Personal loans, student loans, home loans, I mean the lending side of the business has been doing very very well for them. And so for this quarter, I am expecting again growth year-over-year, but I'm putting it at $640 million in revenue for lending for the quarter, which is a little bit less than last quarter. As for the tech platform, $79 million small sequential recovery. Anything above $80 million will be a good surprise. And they told us that new clients ramp weighted in the second half of uh the year. As for financial services, I'm putting this at $515 million. The segment previously, as you can see right here, was down quarter over quarter because SoFi chose more balance sheet lending and less loan platform business volume versus Q4. Now again, I don't know if they'll do it again this quarter. Remains to be seen. If they do, then I guess this number will not be correct, but this is my number right now. Which is also why last quarter we've seen this. Yeah, you've seen the quarter overquarter drop, but it didn't drop here in financial services net interest income. It dropped in this part right here, the orange part, which is noninterest income. So, we'll see. We'll see if they do the exact same thing this quarter, which again, if they do it, that means that that move was the right move for them during those three months. Now, if we look at the stock itself, we'll look at the DCF in a bit. If you look at the stock itself right now, sits at around $16.70 or so. The implied move currently sits at around 11%. So 11% on the upside would bring us at around what is it here? 18 $18.4. 11% on the downside will bring us all the way back down to $14.6 on the daily. If we go up by 11% or so, we'll be back above the 50 and the 100 day. If we go down by 11%, we'll be a bit here in no man's land, even lower than where we were in May. and in March of 2026 all the way back to prices not seen since June 2025. As for the DCF itself, I'm putting 30% probability on the bullcase, 50 on the base, and 20 on the bear, which means we should be at around $2345, which represents 42.4% upside from the price we're at right now. If we're looking here at the base case revenue growth at the first couple of years I'm just projecting what the company itself is projecting and I think it is quite achievable and then after that as you can see growth does slow down quite rapidly. I think if they continue this way I don't see how they won't be growing faster than this. So you're going to say also so why are you modeling this way? Well, if I'm wrong because they grow faster, that's fine by me. But if there are issues in the economy and suddenly things don't go their way, then at least there is some some margin of safety here. Only in all these projections, of course, you can play around with those names. You just go to assumptions and everything that's blue, that's what you change. I think realistically speaking should be achievable unless of course there's a huge macro breakdown rates never come down they always go up etc etc soFi doesn't execute anymore blah blah blah yeah it's possible it's definitely a scenario it's probably closer to a barecase scenario and the thing with the barecase scenario is that if that happens you have to go down another 30.3% okay 20% probability of that happening one in five. Is it too aggressive? Maybe, maybe not. But again, for the sake of discussion here, it's 24 bare, 50 base, 30 bull. Brings us here probability weighted 42.4% upside from the price we're at right now. I strongly believe that SoFi is extremely undervalued at the moment. Donating bringing down the stock is sentiment. It's not the business performance. It's purely sentiment. because you cannot tell me that the business is not performing exceptionally well at the moment. Now, right now on Monday pre-market when I'm recording this, seems like the market is catching a small bit. There was that huge news that Nvidia is going to commit $250 billion or so to a open AI data center or something like that. Maybe that's why we are going to see a lot of the cheap names semiconductors AI neocloud names go up today. But we're starting the week here a little bit uh green. Could this be good for SoFi? Remains to be seen. SoFi is only reporting on Wednesday. And until Wednesday, a lot of things can change stock marketwise. And so all in all, ladies and gentlemen, first of all, please make your own predictions down in the comment section below. Don't just say, "Oh, stock is going to go up, stock is going to go down." Because that doesn't really matter that much. predictions business-wise, result-wise because on Wednesday things might be out of Sofi's control when you purely look at the stock price, but when you look at the business, it's of course something that is 90% in their control. Of course, rates do affect the business like SoFi, but it does also in some ways affect the business positively. Of course, rates coming down as a whole would be more positive than rates staying up, that's for sure. But so far I can still make money in this environment right now. So let me know what you think down in the comment section below. We'll of course go live. Still not sure if we're going to go live or not for PayPal tomorrow, but I guess you'll have to wait and see. Thank you all for joining. Hopefully you have a great start of the week. See you all in the next one. Bye-bye. [music] >> [music] [music]