There's been a lot happening at SoFi Technologies (SOFI) lately, so let's get right to it.
On Oct. 15 the fintech company said that in honor of the 50th anniversary of the Equal Credit Opportunity Act, SoFi was teaming with tennis sensation and entrepreneur Venus Williams and Los Angeles Sparks forward Cameron Brink to launch the Give Her Credit campaign.
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The company said it would begin accepting submissions to award $500,000 to 50 people — each receiving $10,000 — to help advance women’s financial independence and help inspire their financial ambitions.
“It's hard to believe that only 50 years ago some women couldn’t get access to credit without a man’s signature,” Chief Executive Anthony Noto said on X. “Together, we're not just celebrating progress — we're actively investing in the next generation of women's financial freedom.”
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One day earlier, SoFi announced a $2 billion loan platform business agreement for personal loans with funds managed by affiliates of Fortress Investment Group.
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SoFi CEO sees strong demand for loan platform
The agreement will expand SoFi’s capabilities in its loan-platform business, where the company refers prequalified borrowers to loan-origination partners and also originates loans on behalf of third parties, SoFi said.
"SoFi’s loan-platform business is an important part of our strategy to serve the financial needs of more members and diversify toward less capital-intensive and more fee-based sources of revenue,” Noto said in a statement.
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"We’re pleased to see continued strong demand for SoFi’s loan platform business," he said.
"Fortress’s collaboration, seamless execution, and appreciation of the platform's value proposition makes them an exceptional partner," he added.
Noto, a West Point graduate and former U.S. Army Ranger, became SoFI’s CEO in 2019 and initiated the fintech company's IPO in 2021.
During an interview with CNBC last month, Noto said that "consumer activity and sentiment is trending OK."
"We're seeing debit spend continue to be very strong," he said. "It was strong in Q2 and continues to be strong in Q3, but importantly that debit spend is not coming at the expense of deposit growth, which also remains strong."
On Oct. 9, SoFi expanded its credit card portfolio with two additions.
The company said that the SoFi Everyday Cash Rewards card will feature 3% unlimited cash back on dining out and on food delivery, 2% cash back on groceries and 1% cash back on all other eligible purchases.
The SoFi Essential card will provide a credit line to those seeking to improve personal credit scores.
“Expanding SoFi’s credit card offering enables us to better serve more people’s spending and borrowing needs, whether it’s helping them earn rewards for everyday purchases or building their credit,” Noto said.
TheStreet Pro’s Stephen Guilfoyle wrote about SoFi after the announcement and discussed the company's earnings report, which is scheduled for Oct. 29.
Analyst says $2 billion loan platform a positive
Wall Street is estimating earnings of 4 cents a share on revenue of $632 million, he said.
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"If these numbers are realized, this will be the firm's fourth consecutive quarter of profitability, while reflecting revenue growth of 19%," Guilfoyle said.
"Of the nine sell-side analysts I know of who follow this stock, all nine have increased their Q3 earnings estimates for this name since the third quarter started," he added.
SoFi beat second-quarter expectations in July, with net interest income — the difference between what a bank takes in on loans and pays out on deposits — increasing 42% year over year to $412.6 million. The net interest margin widened to 5.83% from 5.74%.
New-member additions ran past 643,000 for the quarter and total membership reached nearly 8.8 million by quarter's end, up 41% from a year earlier.
Sofi shares are up 2.4% year-to-date and 25% from a year ago.
Keefe Bruyette said on Oct. 14 that SoFi's stock was trading up following the Fortress announcement, according to The Fly.
While details in the release were fairly limited, the announcement is a positive as it potentially demonstrates improving investor demand for SoFi's paper, the firm said in a research note.
Further, the ramping of the company's loan-platform business is an efficient way for the bank to generate fee income without consuming capital or adding credit risk, adds Keefe.
Keefe Bruyette said that it was affirming a market perform rating on the shares with a $7 price target.
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Analysts at Wedbush said in a report on financial institutions that “we expect underperform-rated SoFi to report an in-line third quarter with adjusted net revenue in line with guidance of $625 million to $645 million.”
"We believe delinquency rates peaked in the first quarter, in line with guidance, and the pace of [net capital outflow] increases may continue to slow," the firm said. It referred to net charge-offs, the dollar amount representing the difference between gross charge-offs and any subsequent recoveries of delinquent debt.
"That said," Webush added, "we expect SoFi’s conservative stance to balance sheet growth may lead to below average revenue growth in 2025."
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