SoFi: Leading In A Crisis

Update - May 1, 2023

SoFi reported a great quarter. The market is extrapolating too much on full year guidance. The fintech beat Q1'23 EBITDA targets by over $30 million. An investor shouldn't sell just b/c the company provided conservative guidance for the full-year by just hiking guidance for 2023 by $8 million. 

• SoFi Technologies (NASDAQ:SOFI) stock dropped 9.1% in Monday midday trading after the fintech bank issued full-year guidance indicating some metrics could trail Wall Street expectations.
• The company, known for refinancing student loans, now expects 2023 adjusted net revenue of $1.955B-$2.02B vs. $1.97B consensus and up from its prior range of $1.925B-$2.0B. That indicates that at its worst, SOFI's annual revenue could still fall below the average analyst estimate.
• The company also increased its outlook for adjusted EBITDA to $268M-$288M, up from its prior guidance of $260M-$280M, and bracketing the Visible Alpha consensus of $271.3M.

Original article published on Mar. 28

• SoFi launched a $2 million solution to the FDIC insurance limits in a move to garner more deposits during this banking crisis.
• The digital bank affirmed Q1'23 deposits should already match the $2+ billion levels of the prior 2 quarters.
• The fintech stock remains incredibly cheap at 11x '24 adjusted EBITDA talks.

One of the best times for a company to take market share is during a crisis. SoFi Technologies (NASDAQ:SOFI) is making this move with a plan to internally boost FDIC insurance for customer accounts in a move that shouldn't surprise investors considering how easily the lender thrived after the student debt moratorium. My investment thesis remains ultra Bullish on the fintech set to benefit from the crisis while most regional banks contract.

Read the full article on Seeking Alpha. 

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