Procore signs multi-year strategic collaboration agreement with AWS
On Tuesday, UBS analyst Tim Chiodo increased the price target on SoFi Technologies (NASDAQ:SOFI) to $14.00, up from the previous $10.50, while maintaining a Neutral rating on the company’s stock. The revision follows SoFi’s management providing a financial outlook for fiscal year 2025, projecting adjusted revenues to reach between $3,200 million and $3,275 million. This forecast represents a year-over-year growth of 23-26% and is approximately 6% higher than the current market consensus of $3,062 million at the midpoint. The company has demonstrated strong growth momentum, with revenue increasing 32% in the last twelve months to $2.5 billion.According to InvestingPro analysis, SoFi’s stock is currently trading above its Fair Value, following a remarkable 117% price increase over the past six months. InvestingPro subscribers have access to 11 additional key insights about SoFi’s valuation and growth prospects.
Despite the optimistic revenue outlook, SoFi’s guidance for FY2025 adjusted EBITDA of $845 million to $865 million is roughly 6% below street estimates, compared to current EBITDA of $650 million. The company also set an implied adjusted EBITDA margin of 26%, which is 400 basis points lower than their 30% incremental margin target. SoFi’s management highlighted their strategy of investing organically in the company’s existing services, including SoFi Plus, SoFi Invest, small and medium-sized business (SMB) products, and their Credit Card offerings. These investments are expected to support SoFi’s confidence in achieving an EPS range of 55 to 80 cents for 2026, up from the FY2025 EPS guidance of 25 to 27 cents.
The UBS analyst acknowledged SoFi’s relatively strong position in the U.S. Neobank market, which is anticipated to undergo consolidation and re-bundling of services. Chiodo noted the positives of SoFi’s expectation to maintain GAAP profitability but also pointed out that the risk-reward balance for the stock appears to be even at the moment.
SoFi Technologies’ management’s forward-looking statements and guidance have set the stage for the company’s future growth and profitability targets. With the increased price target from UBS, investors now have a new metric to consider when evaluating the company’s stock performance and potential investment opportunities.
In other recent news, SoFi Technologies has reported several significant developments. The company’s Q4 earnings outperformed expectations, with an EBITDA of $198 million, surpassing both Goldman Sachs and consensus estimates. Despite these strong results, SoFi’s EBITDA guidance for 2025 fell short of expectations. The company anticipates achieving between $845 million and $865 million, which is lower than the consensus estimate.
Needham analysts have raised their price target for SoFi to $20 and maintained a Buy rating, while Goldman Sachs has reaffirmed its Neutral stance with a $9.50 target. Contrarily, BofA Securities and Keefe, Bruyette & Woods have downgraded the stock due to valuation concerns.
SoFi also announced the upcoming resignation of board member Michael Bingle, effective January 2025, and CEO Anthony Noto entered into a prepaid variable forward contract on company stock, resulting in an upfront cash payment of $22.4 million. These are among the recent developments that investors should consider.
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