SoFi Technologies delivered a stronger-than-expected third-quarter report on Tuesday, sending shares higher as the fintech firm also lifted its full-year revenue outlook. The company posted adjusted earnings of 18 cents per share on revenue of $1.39 billion, surpassing analyst forecasts of 17 cents and $1.25 billion, respectively.
Despite the post-earnings pop, the stock remains roughly 40% below its year-to-date peak, reflecting the market's earlier skepticism about growth sustainability and profitability.
Existing customers drive product adoption
A notable highlight from the quarter was that existing members accounted for 51% of new product openings. This indicates that SoFi's expanding ecosystem is encouraging customers to deepen their engagement with the neobank, which can improve acquisition economics since the initial marketing spend has already been incurred.
Cross-selling additional services—such as lending, spending, and investing—creates new revenue streams and enhances the lifetime value of each customer. Adjusted EBITDA surged 70% to $469.8 million, outpacing the 44% growth in adjusted revenue, a sign of operating leverage.
For shareholders, this suggests that SoFi's investment case increasingly hinges on monetizing its existing client base more efficiently, alongside attracting new users. Sustaining this combination could provide a firmer foundation for future earnings growth.
Lending engine warrants scrutiny
However, diversification has its limits. Lending-adjusted revenue jumped 68% year-over-year, while Technology Platform revenue fell 24%, partly due to the departure of a major customer. Fee-based revenue reached $570.6 million, but that figure includes loan-related fees, so investors should not treat every fee dollar as independent of the credit cycle.
The profitability of lending depends not only on loan demand but also on borrower performance and the economics of funding and distributing those loans. Strong loan growth tells only part of the story.
Management raised its revenue outlook but maintained its 2026 adjusted earnings forecast at 61 cents per share, suggesting that the beat strengthens the growth thesis but does not guarantee that additional revenue will consistently reach the bottom line.
Valuation and technical outlook
SoFi's new 2027 adjusted EPS forecast of 90 cents, above the consensus of 82 cents, provides a useful valuation anchor. At around $16.5, the stock trades at less than 20 times that estimate; at $22.50, the multiple would reach 25 times.
Technically, shares rallied past their 20-day moving average on Tuesday and are now testing the 50-day moving average. A decisive break above $16.6 could accelerate upward momentum in the near term. The relative strength index sits in the mid-50s, indicating the stock is far from overbought levels that often trigger profit-taking.
In summary, SoFi's quarterly beat and raised guidance are positive signals, but investors should weigh the valuation and the underlying economics of its lending business before chasing the rally.
This article is for informational purposes only and does not constitute financial advice.
