JP Morgan puts expectations on the Sofi share prior to earnings

Sofi Technologies (Nasdaq: Sofi? was a prominent artist in 2024, and its momentum has led into 2025, with the stock ~ 15% year to date. In fact, this rally has propelled the stock to levels that were not seen in three years, defying a wider downturn in the fintech sector, even in the middle of the rising treasury, reducing expectations of rate cuts in 2025.

With Neobank, which is set to report the Q4 earnings before the market opens tomorrow (January 27), investors hope the company can deliver a strong pressure and build on the current momentum.

Looking forward to the reading, JP Morgan Analyst Reginald Smith takes an optimistic attitude about what is about to unfold.

“In the end,” notes Smith, “We are positive to the pressure despite the rising treasury, which could be a ~ $ 100 million. MadTat to borrow FVS (Net of hedges and pillow from 3Q24) as we think Sofi’s loan platform business, which contributed> $ 50 million

Capital-Light Loan Platform Business’ Momentum was the big surprise last quarter. Here Sofi transfer loans and transfer them immediately to third parties and earns referral or origin fees. The company had not previously brought much attention to this channel, but in 3Q24 Sofi stammered approx. $ 1 billion in personal loans and generated $ 56 million in high-margin fees-one increase of more than 5x.

“We like this business,” Smith adds, “as it allows Sofi to make money from applicants who may otherwise have been rejected (Sofi rejects> 70% of PL applicants) without straining their own balance or capital conditions , which could eventually increase ROE and drive more extensions.

Looking ahead, Smith expects Sofis 2025 -Guide to probably factor in low 20% revenue growth and about 30% EBITDA margins, inline with street expectations. Smith also points out that the company has a track record to beat and raise goals as the year progresses.

As for what to do with the stock, Smith’s advice is to load any weakness by pressure, but he refrains from getting on board right now. While positive by 2025, given the recent strength, shares could “take a breath in printed.”

“Looking at 2025,” summarized the analyst, “We expect the conversation to switch to revenue generation of financial service, loan platform business, technology platforms and growth in the balance, while recognizing inflation and rising rates could re -establish debates on fair value marks and brands credit losses. “

All in all, Smith assigns a neutral rating for SOFI shares along with a price target of $ 16, suggesting a ~ 11% disadvantage from the current share price. (Click here to see Smiths Track Record)

Smith is not alone in playing it safely. 4 other analysts also sit on the fence, while 6 rates on purchases and four waving with the sales flag. Consensus? A team (ie neutral) rating. The broader view suggests that Sofi may be flying too high, with the average of $ 13.19 average price targets pointing to a potential fall of 26% over the next year. (See Sofi Stock Prognosis?

To find great ideas for shares that deal with attractive valuations, visit TIRPRANKS ‘best shares to buy, a tool that unites all tipranks’ equity insights.

Disclaimer: The statements expressed in this article are solely as the highlighted analyst. The content is intended only to be used for information purposes. It is very important to perform your own analysis before making any investment.