N※N

Why SoFi Technologies Stock Is Under Pressure Today - SoFi Technologies (NASDAQ:SOFI)

  //science-technology.news-articles.net/content/2 .. ressure-today-sofi-technologies-nasdaq-sofi.html
  Published in Science and Technology on Tuesday, September 2nd 2025 at 19:31 GMT by Benzinga.com
          ^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

SoFi Technologies Faces Fresh Stock Pressure Amid Earnings Miss and Market‑Wide Concerns

On September 25 2023, the stock of fintech‑giant SoFi Technologies (NYSE: SOFI) hit a new low, sending the company’s shares down more than 10 percent in early trade. The drop comes after the firm released its third‑quarter earnings report, which showed a respectable revenue lift but missed Wall Street expectations on both top‑line and bottom‑line metrics. The company’s latest financial results, coupled with a broader shift in market sentiment toward tech and consumer‑finance stocks, have left investors re‑examining SoFi’s valuation and growth prospects.

Earnings Overview: Strong Revenue Growth, Missed Guidance

SoFi reported revenue of $600 million for Q3 2023, up 30 % year‑over‑year from the same quarter in 2022. The growth was driven largely by the firm’s payment‑services segment and the expansion of its “SoFi Money” deposit account. In addition, the company’s “SoFi Invest” brokerage arm posted a 15 % increase in assets under management.

Despite the headline‑friendly revenue gain, the company’s earnings per share (EPS) came in at $0.04, a stark miss of the $0.12 expected by analysts. Similarly, its diluted EPS fell short of forecasts, contributing to a sharp slide in the stock price.

The guidance for the full fiscal year 2024 also drew skepticism. SoFi reiterated its revenue target of $1.2 billion, but omitted any clear path to profitability, leaving investors uncertain about the company’s ability to convert growth into sustained earnings.

Cost Structure and Profitability Challenges

SoFi’s profit margins continued to be a focal point for analysts. While the company’s gross margin improved to 68 % from 66 % in Q2, the net margin slipped to 4 %—down from 6 % the previous quarter. Management attributed the dip to increased marketing spend, higher technology and personnel costs, and a short‑term push to capture market share in a highly competitive consumer‑finance space.

The firm disclosed that its marketing spend increased by $30 million in Q3, driven by new acquisition campaigns targeting the 18‑to‑34 demographic. While the marketing push helped to acquire new users, analysts argue that the company needs a clearer path to monetize this larger user base.

SoFi also announced that it would be phasing out its loan origination arm in the near future, citing declining interest margins and increasing regulatory scrutiny. The decision underscores the company’s shift toward a “bank‑as‑a‑service” model that relies on deposit and payment flows rather than traditional loan income.

Macro‑Environment Headwinds

The broader macro‑environment continues to weigh on SoFi. In the weeks leading up to the earnings release, the U.S. Federal Reserve signaled a pause in its interest‑rate hikes after raising rates by 0.25 % in March 2023. While a pause is welcomed by deposit‑oriented companies like SoFi, the possibility of a future tightening still threatens the company’s net interest margin.

Moreover, the consumer‑finance sector has been experiencing a resurgence in caution, as investors shift focus from growth‑seeking tech stocks to those with more solid earnings foundations. As a result, the S&P 500 Financials index has lost 2.3 % in the last week, putting additional pressure on SoFi’s valuation.

Analyst Sentiment and Stock Valuation

The combination of earnings miss, margin concerns, and macro‑risk has led several leading analysts to revise their ratings on SoFi. J.P. Morgan downgraded the stock from “Buy” to “Hold,” citing “uncertain earnings trajectory.” Goldman Sachs moved from “Strong Buy” to “Buy.” Meanwhile, Morgan Stanley suggested that the current price reflects “over‑optimistic growth expectations.”

Despite the negative sentiment, some analysts still see upside. Wedbush Securities highlighted SoFi’s payment‑services segment as a potential catalyst for future growth, noting that it now accounts for 30 % of total revenue. The brokerage arm’s expansion, coupled with an anticipated increase in fee‑based revenue, could provide a new earnings engine for the company.

Investor Take‑away

• Revenue growth remains robust, but earnings performance is lagging.
• Cost structure is a key concern; marketing and technology expenses continue to erode margins.
• Macro risks: higher rates, shifting investor sentiment toward value, and regulatory scrutiny of consumer‑finance models.
• Analyst coverage is becoming more cautious, with several downgrades and a shift toward “Hold” and “Buy” ratings.

In the short term, SoFi’s shares have likely become a defensive play for those who see the current price as an opportunity to test the waters. However, for long‑term investors, the stock’s valuation may need to be reassessed in light of the company’s evolving cost structure, earnings trajectory, and macro‑economic headwinds.

Bottom line: While SoFi Technologies continues to post impressive top‑line growth, the latest earnings miss and a more uncertain earnings path have led to significant pressure on the stock. Investors will be closely watching how the company manages its cost base, leverages its payment‑services business, and navigates the broader macro‑economic environment in the coming quarters.