personal finance company Sofi Technologies (NASDAQ:SOFI) the stock was punished by the benchmark’s sell-off despite strong growth in its various segments. The popular student, personal and home loan provider saw record growth in 2021 by growing its customer base to 3.5 million users, up more than 80%. The Company will benefit from the seven interest rate hikes scheduled for 2022 to combat runaway inflation. Further tailwinds from its banking charter should materialize for its top and bottom results. Sofi acquires cloud-based core banking platform Technisys to help vertically integrate its business segments and accelerate growth opportunities. Cautious investors looking for an advantageous entry into a rising fintech player can watch for opportunistic pullbacks in Sofi Technologies shares.
Publication of results for the fourth quarter of fiscal 2021
On March 1, 2022, Sofi released its fiscal fourth quarter 2021 results for the quarter ending December 2021. The company reported a diluted adjusted earnings per share (EPS) loss of (-$0.15) missing estimates consensus for a loss of (-$0.12) by (-$0.03). Total revenue increased 53.8% year-over-year to $279.88 million from $2,279.47 million according to consensus analyst estimates. The company hit a record 523,000 new quarterly members, up 39% sequentially and 906,000 new quarterly products, up 51% sequentially. Sofi CEO Anthony Noto said, “We hit new highs for our key financial and operational metrics in the fourth quarter, ending 2021 with record full-year results. Adjusted net income of $280 million was another quarterly record for us, up 54% year over year and up sequentially, even with the unexpected extension of the federal student loan payment moratorium end December. We surpassed $1 billion in adjusted annual net revenue for the first time. We also achieved adjusted EBITDA of $5 million in the fourth quarter – our sixth consecutive positive quarter – resulting in positive adjusted EBITDA of $30 million for the full year. The best part is that we were able to meet our Adjusted Revenue and Adjusted EBITDA targets ahead of schedule in an increasingly challenging operating environment, while significantly exceeding our Member Growth forecasts.
Mixed Income Guidelines
Sofi issued a lower earnings forecast for the first quarter of fiscal 2022 with revenue expected between $280 million and $285 million from analysts’ estimates of $303.56. The company raised its fiscal 2022 guidance for revenue to $1.57 billion from $1.45 billion according to consensus analyst estimates.
Takeaways from the conference call
CEO Noto continued to push for Sofi to hit new highs on key financial metrics, including 54% year-on-year revenue growth. Growth continued across its three business segments, generating more than $1 billion in total annual sales for 2021 and a sixth consecutive quarter of adjusted EBITDA. Sofi ended 2021 with 3.5 million total members, up 87% year-over-year. Its subsidiary Galileo increased its account by 67% to 100 million. Personal loans grew 168% year-on-year in Q4 2021, driven by improvements in its technology, loan quality and credit models. The company has increased purchased home loans from low numbers to lower double digits relative to percentages of total home loan value. Sofi relaunched jumbo loans in the second half of 2021, helping to drive growth despite rising rates. Student loans rose 50% sequentially, generating more than $1.5 billion ahead of the January federal student loan moratorium deadline. The company expects continued acceleration in loan growth, driven by opportunities presented to it by the new banking license it acquired in 2021. The company added 2.5 million new financial services products in 2021 and launched services such as SoFi Money, SoFi Checking and Savings offering members 1% APR and the SoFi Credit Card, which offers rewards for smart shopping and financial behavior.
SOFI Opportunistic Withdrawal Levels
Using rifle charts on the weekly and daily time frames provides an accurate view of the price action playing field for SOFI stocks. Rifles weekly chart peaked at $24.68 Fibonacci level (fib) before collapsing towards the $7.52 fib thereafter. The Rifle’s weekly chart is trending lower with a 5-period moving average (MA) down at $9.90 followed by the 15-period MA at $12.42. The stochastic is compressed below the 10 band indicating very oversold conditions. The weekly lower Bollinger Bands (BB) lie at $3.80. The weekly 50-period MA is $16.09. The downward trend in the Rifles daily chart is beginning to slow as the weak market structure (MSL) buy triggers above $8.76. The daily 5-period MA flattens at $8.43 while the 15-period MA closes the channel at $13.08. The daily Stochastic is trying to break above the 10 band. The daily BB lower is wrapping at $6.96. Cautious investors can watch for opportunistic pullbacks at the $8.00 level, the $7.52 fib level, the $6.66 level, the $5.56 level and the 4.43 price level $. The upward trajectories are from the $11.83 level to the $17.69 fib level.