SoFi Stock Is 46% Below Its High. Is It Cheap, or Does It Just Look Cheap?
Revenue is up 44%, profit 73%, and management has promised a figure for 2027 for the first time. Yet the stock is nearly half its annual high and down from n
Key points
Two days before earnings, short sellers held a record 18% of the freely traded shares, about 217 million shares.
Revenue rose 44% and profit 73%, yet the stock remains 46% below its annual high of 32,73 USD.
Accounting showed more than 800 million dollars in fair-value losses, but so far there’s no sign of them in cash.
Management issued its first outlook for 2027, with earnings of 0,90 USD per share and an unexpected assumption about interest rates.
Analyst price targets range from 15 to 29 USD; Bulios fair value is 11,32 USD.
A year that was supposed to look completely different
In January, SoFi Technologies $SOFI penciled in two Fed rate cuts. Instead, rates were raised in September, and on October 28 the Fed held them at 3,75 to 4%, with two committee members voting for another increase. Meanwhile, the yield on the 10-year U.S. Treasury approached 5%. For a company with more than 50 billion dollars in consumer loans on its balance sheet, this is about the worst weather imaginable.
The market had its own way of pricing that in. The stock is down -32,7% year to date, has lost 39% over the past twelve months, and has fallen 46% from its annual high of 32,73 USD. According to Ortex data, two days before earnings short sellers held a record 18% of the freely traded shares, roughly 217 million shares. The only one buying against the trend was CEO Anthony Noto, who added 316 thousand shares in September.
Then came October 27. Revenue adjusted for one-off effects rose 44% to 1,4 billion dollars, and net income climbed 73% to 241 million dollars. The stock jumped 13,4% in a single day to 16,40 USD and closed at 17,61 USD on October 29, more than a fifth higher than before earnings. Short sellers got a lesson they won’t forget. But the debate over what the stock should be worth didn’t end there. It just moved elsewhere.