Jeffrey concludes by comparing SoFi's potential to American Express (NYSE:AXP), suggesting that SoFi's shares could reach a mid-$30s long-term stock price, approaching American Express's price-to-tangible-book ratio of 8.6x. Currently trading at a P/E ratio of 100.17, SoFi's valuation metrics and detailed peer comparisons are available through InvestingPro's extensive financial analysis tools. Currently trading at a P/E ratio of 100.17, SoFi's valuation metrics and detailed peer comparisons are available through InvestingPro's extensive financial analysis tools. With the anticipation of strong financial results, Jeffrey expects SoFi to deliver better-than-expected fourth-quarter revenue and EBITDA, underlining the effectiveness of the company's Financial Services Productivity Loop and its shift towards a fee-centric revenue model.
Despite the recent strength in SoFi's shares, Jeffrey noted the possibility of just in-line initial 2025 EBITDA guidance due to potential aggressive growth-focused investments. He also mentioned that SoFi's management is adept at addressing concerns that may arise from the complexity of reported results, though he acknowledged an increased volatility risk.
Jeffrey concludes by comparing SoFi's potential to American Express, suggesting that SoFi's shares could reach a mid-$30s long-term stock price, approaching American Express's price-to-tangible-book ratio of 8.6x. Currently trading at a P/E ratio of 100.17, SoFi's valuation metrics and detailed peer comparisons are available through InvestingPro's extensive financial analysis tools.
Looking ahead to 2025 and 2026, Jeffrey's base case assumes a 20% organic revenue growth and a 50%-plus incremental EBITDA margin, leading to a 35%-40% annual EBITDA expansion. The financial services segment is expected to drive both revenue and EBITDA, with platform fees becoming an increasingly vital contributor to revenue and profit. Jeffrey projects platform fees to reach $329 million in 2025 and $522 million in 2026, and foresees fee income as a percent of total approaching 30% in 2025, with the potential to rise towards 70%.
Jeffrey concludes by comparing SoFi's potential to American Express, suggesting that SoFi's shares could reach a mid-$30s long-term stock price, approaching American Express's price-to-tangible-book ratio of 8.6x.
In other recent news, SoFi Technologies (NASDAQ:SOFI) has been the subject of several significant developments. The company announced the upcoming resignation of board member Michael Bingle, effective January 13, 2025. This decision, as per the company, does not stem from any disagreements regarding SoFi's operations, policies, or practices. The process for filling the board vacancy post-Bingle's departure remains unclear.
On the financial front, SoFi reported robust growth in its Q3 2024 earnings call, with adjusted net revenue reaching $689 million, marking a 30% increase from the previous year. The financial services segment doubled its revenue to $238 million, and the lending segment also performed strongly with $6.3 billion in loan volume.
In terms of analyst updates, Keefe, Bruyette & Woods, and BofA Securities downgraded SoFi's stock, citing concerns about the company's valuation. Conversely, Mizuho (NYSE:MFG) Securities maintained a positive stance on SoFi, raising its price target on the company's stock to $16.00.
Other noteworthy developments include SoFi CEO Anthony Noto entering into a prepaid variable forward contract on company stock, resulting in an upfront cash payment of $22.4 million. Additionally, Silver Lake Technology Associates IV, L.P. and related entities sold approximately 31.2 million shares of SoFi, leading to a reduction in Silver Lake's ownership stake in the company.
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