Should One Consider Buying SoFi Shares Before the Company Reports Q2 Earnings on July 29?
Financial technology company SoFi is preparing to announce its second-quarter earnings for 2025 on July 29. The company, known for its lending and financial services, has been experiencing significant growth in recent quarters, as indicated by its latest financial updates.
SoFi's Q1 adjusted net revenue from its lending business surged by 27% year-over-year, amounting to $412 million. The contribution margin of this business sector was a robust 58%. Notably, the Loan Platform Business (LPB) contributed $96 million in adjusted net revenue, marking a 44% increase from the previous quarter.
The growth in the lending sector was primarily driven by personal loans, which accounted for the majority of SoFi's loan originations in Q1, totaling $5.5 billion. Loan originations for SoFi in Q1 reached a record $7.2 billion, marking a 66% increase from the year prior.
In addition to its lending business, SoFi has seen impressive growth in its fee-based, non-lending businesses. Fee-based revenue rose 67% to a record $315 million in Q1. A significant portion of SoFi's revenue comes from these fee-based businesses, which surged to $407 million in Q1, a 66% jump from the year prior.
The growth in SoFi's deposits has also been noteworthy. Deposits have grown to $27.3 billion, providing a stable and cost-effective funding base. The growth in deposits is expected to reduce SoFi's annual funding costs, supporting future earnings.
SoFi's management has guided for adjusted net revenue between $785 million and $805 million for Q2, representing a 31% to 34% increase compared to the same quarter last year. The company also expects to deliver adjusted net income between $60 million and $70 million in Q2, with adjusted EPS in the range of $0.05 to $0.06. Analysts forecast EPS of $0.06 for Q2.
Despite these strong growth metrics and earnings beats reported in prior quarters, the analyst consensus ahead of Q2 2025 earnings is mixed. While the growth trajectory and earnings beats have excited investors, the analyst consensus emphasizes strong fundamentals alongside valuation risk.
SoFi's stock has grown by 99% in the last three months and 179% over the past year, trading at a forward P/E near 68.96x, about 600% above the sector average. This has tempered bullishness on the stock.
The typical price target reflects this balance, with modest upside projected if SoFi delivers or exceeds expectations, but limited enthusiasm for aggressive multiple expansion given market conditions. Barclays raised its price target based on improved credit metrics and delinquency trends, although the precise numeric target is not publicly detailed.
In conclusion, SoFi's growth trajectory and earnings beats have excited investors, but the analyst consensus ahead of Q2 2025 earnings is mixed, emphasizing strong fundamentals alongside valuation risk. The typical price target reflects this balance, with modest upside projected if SoFi delivers or exceeds expectations, but limited enthusiasm for aggressive multiple expansion given market conditions.
Investors are eagerly awaiting SoFi's second-quarter earnings announcement on July 29, as the financial technology company has been demonstrating significant growth in its lending and fee-based businesses. SoFi's Q2 adjusted net revenue is anticipated to range between $785 million and $805 million, representing a notable increase from the same quarter last year. Moreover, the company's strong growth in the stock-market has been reflected in its stock price, which has grown by 99% in the last three months and 179% over the past year. However, the analyst consensus is mixed, with a focus on strong fundamentals and valuation risk, suggesting modest upside if the company delivers or exceeds expectations, but limited enthusiasm for aggressive multiple expansion given market conditions.
