SoFi Technologies (SOFI) Q1 Earnings Preview: Buy or Sell?

Trade SOFI Stock Your Capital Is At Risk
Ollie Martin
Updated: 10 May 2022

Key points:

  • SoFi Technologies Q1 earnings probably won't spark much of a market reaction
  • Delivering on EPS and Revenue for the last two quarters, can we expect the same?
  • Federal student loan moratorium is already priced into current levels

Digital banking has taken off, with brick and mortar institutions slowly making way for online-based or mobile-based applications; serving the user just as effectively, and utilizing the digital transformation to ensure its customer base remains loyal and intact. 

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Sofi Technologies (NASDAQ: SOFI) is leading the new wave of banking, a solely digital app used for personal finance, offering a variety of services including  personal and student loans, mortgages and credit cards, and even investment options. The company warranted hype to begin with, yet selling pressure has since outweighed bullish sentiment following a wider high-growth tech selloff.  

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The company is set to release its first-quarter earnings after the bell today, SoFi has delivered on EPS and revenue beats for the last two quarters, yet bulls simply aren’t sticking around for long enough to maintain any upwards momentum. The only key factor investors might have been worrying about is the federal student loan moratorium extended through August, but a strong market reaction following an announcement in April means that sentiment is likely already factored into the price.

According to analysts, although the company’s main three segments – lending, financial services, and technology platform – will allo deliver growth across Q1, it comes with a $0.14 loss, as estimated. At a time when geopolitical uncertainty is causing companies to hold back or even cut guidance, SoFi didn’t cut its Q1 guidance, but cut revenue expectations by 6% across the whole year and adjusted earnings by 44%.

Tomorrow, we really need to see further clarity regarding the fog surrounding student loans. Where will the company go next? What avenues of growth are being explored? Should management fail to comment on this, the likelihood is we won’t see much change in share price movement.

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