Fintech stalwart SoFi (NASDAQ:SOFI) is facing a significant test with its approaching first-quarter earnings report due April 29. The news comes amid skepticism among Wall Street analysts regarding the forward viability of the company. Although a popular name among retail investors, SOFI stock has lost more than 25% year-to-date (YTD).
As of this writing, 13 analysts have weighed in on SoFi’s bottom-line target for Q1. The average earnings consensus comes in at 1 cent per share, with a high estimate of 4 cents and a low estimate for a loss of 2 cents. In Q1 2023, the firm posted a loss of 5 cents per share, although that figure beat the consensus view calling for a loss of 8 cents.
As for the top line, eight analysts have an average estimate of $554.31 million in revenue. The high estimate for sales is $593 million while the low estimate calls for $529.73 million. A year ago, SoFi posted revenue of $460.16 million for the quarter. If SoFi reaches the consensus estimate for Q1 2024, it will represent 20.5% year-over-year (YOY) growth.
SOFI Stock Stares Down a Key Obstacle
Despite a rough outing so far in 2024, SOFI stock has still gained more than 18% over the past 12 months. Currently, shares trade higher than the most recent bottom closing price of $6.61 per share on Nov. 20. So, it’s possible that a strong Q1 performance could help reinvigorate sentiment for shares.
Still, management will likely need to deliver something special in order to boost SOFI stock. There are some advantages heading into the disclosure, but they’re modest. For example, recent financial maneuverings involving convertible senior notes should be accretive to SoFi’s GAAP net income. However, on a per-share basis, the impact may be negligible.
That said, the move is also expected to be accretive to total tangible book value and tangible book value per share by 8% to 10%. Whether that will be enough to convince analysts is another story.
Fundamentally, SOFI stock faces rising pressure as other enterprises boost their product offerings. Perhaps most notably, Robinhood (NASDAQ:HOOD) recently announced its entry into the credit card market. This card offers many enticing features, including 3% cash back on all purchases.
Why It Matters
Right now, the analyst consensus view for SOFI stock is a hold based on 16 opinions. The average price target for shares stands at $8.91, implying about 25% upside potential. Notably, the last analyst upgrade was on Oct. 31, when Morgan Stanley upgraded to “equal weight” from “underweight.” Since then, however, there have been two downgrades, which includes Morgan Stanley reverting SOFI back to an “underweight” rating.
On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
