SoFi stock rockets as earnings deemed ‘outstanding’

Shares of SoFi Technologies Inc. were flying higher in premarket trading Tuesday after the financial-technology company posted results that were dubbed “outstanding” by one analyst.

Though the company continues to be negatively impacted by the student-loan moratorium, SoFi
SOFI,
+13.42%

exceeded expectations with its latest financials amid strength in other business areas as the company is seeing early benefits from its banking charter.

Shares were up more than 16% in premarket action Tuesday.

Revenue for the third quarter surged to $424.0 million from $272.0 million, while analysts tracked by FactSet were modeling $399.2 million, based on a sampling of three estimates.

SoFi also posted a comprehensive loss of $75.8 million, or 9 cents a share, whereas it lost $30.0 million, or 5 cents a share, in the year-before quarter. The FactSet consensus, based on four estimates, was for a 10-cent loss on a per-share basis.

The company notched adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $44.3 million, far above the $10.3 million that the company generated a year prior, and also ahead of the FactSet consensus, which was for $29.1 million.

SoFi’s performance on that non-GAAP metric was the “highlight” of the latest report, according to Mizuho’s Dan Dolev, who noted that SoFi’s most recent adjusted Ebitda total was roughly double what the company reported in the second quarter.

Overall, the results were “outstanding,” from his perspective, especially in light of a “challenging interest-rate environment.”

Additionally, SoFi upped its adjusted Ebitda forecast for the full year. Executives now model $115 million to $120 million, whereas they were previously expecting $104 million to $109 million.

The forecast “implies yet another ~$45 million of adjusted Ebitda in 4Q at the mid-point,” which is among factors that “should be very well-received by investors,” according to Mizuho’s Dolev.

The outlook “will be a considerable positive relative to expectations that were likely for a modest guide-down given volatile rates and capital markets,” added Jefferies analyst John Hecht. “The guide shows that SOFI is being well managed in a turbulent environment and that the business model is exhibiting more-than-expected resilience.”

SoFi highlighted in its release that it added almost 424,000 new members in the quarter, along with 635,000 new products. The company saw $2.8 billion in personal-loan originations.

The company officially obtained a bank charter earlier this year, and Chief Executive Anthony Noto said that the move continues to pay off for SoFi.

“Our bank charter is enabling new flexibility that has proven even more valuable in light of the current macro environment, and the economic benefits are already starting to materialize and positively impact our operating and financial results,” he said.

SoFi’s total deposits increased 86% during the third quarter and 85% of SoFi Money deposits are from direct-deposit members, he added.

The growth in “high-quality deposits” has enabled SoFi to see a lower cost of funding for its loans, per Noto.

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