$SOFI · The Motley Fool · 2026-10-27

So reported earnings on Tuesday morning and the stock closed the day up 14%. This is the kind of report that investors were looking for. So today in the show we're going to dig into the earnings report, what we learned about the company's operations in the third quarter of 2026 and more importantly what does the rest of the year look like and what does management see in 2027.

And I think you look at SoFi, everything is moving in the right direction from revenue from members and also their margins are improving. That's why the market was so impressed with the results.

That's why the stock's moving higher. Crazy enough, stocks down still almost 50% over the past year. So for investors looking for a value in the banking industry, there's not a lot of companies that are growing this quickly,

Revenue was up 44% year-over-year. That revenue growth is accelerating. That's exactly what we want to see. Big part of that acceleration was actually their loan business. So, they have raised capital in the past year or so.

That's allowing them to do more loans, particularly on the personal loan side, but are also growing in the mortgage side, which I'll get to in just a moment.

Management is now expecting a little over $5 billion worth of adjusted net revenue in 2025. And they gave 2027 guidance, expecting about $6.4 billion worth of adjusted net revenue.

They're also expecting 90 cents per share in earnings. That means that the stock's only trading for about 18 times earnings. Yes, there are cheaper bank stocks out there, but not a lot of cheaper bank stocks that are growing this quickly.

Now, anytime I look at SoFi, I like to start with the members and the products. This is really the first key performance indicator that investors should be looking at. How fast is the members growing?

Still growing extremely quickly. New members, almost 1.2 million just in the third quarter alone. Year-over-year growth so far this year is 35%. Those members are also adopting more products.

That's ultimately going to drive revenue, 44% increase in the number of products. And now each customer has adopted 1.56 products. Management wants to increase that to well over two in the next few years. But they're moving in the right direction.

This means that people with credit cards are investing with SoFi or they're taking out a personal loan. The more you can have cross-platform usage, the more you can use things like SoFi Plus to get customers to adopt more products, the more revenue you're going to make as a bank, as a digital bank like SoFi is.

So, these are the metrics that are the most important drivers of the business and they're all moving in the right direction.

Margins are also moving in the right direction. It was as recently as 2023 that the company was losing money. Now they have adjusted net income positive of $243 million just in the third quarter of 2026.

Expecting that number to be $840 million for the full year.

And it's a diversified revenue mix too. The company said that there are now I think it's eight products that are generating over hund00 million worth of revenue. They're trying to increase that.

So have a much more diversified mix of revenue. Also want to have more feebased revenue. You can see that that's gone from 25% in as recently as 2022. now solidly over 40%. And what that allows SoFi to do is have more revenue without taking bank-like risks, without having default risk or interest rate risks.

These are the risks that banks have to manage constantly. So the more of your revenue that's coming from fees, the less of those risks you're taking on likely the higher multiple the market is going to be willing to pay.

Tangible book value. This is another metric that investors look at continues to move higher. Now $9.7 billion. That big jump that you see in 2025 is actually because the company raised capital.

So issued stock at a high price to book multiple that increases the tangible book. It does increase the shares outstanding as well. So there was dilution when that came out. But management is using that capital to capital to grow the lending business.

And if they can do that effectively, that's the way to grow a bank long term.

And speaking of lending, 68% growth year-over-year. Just a phenomenal growth rate. contribution profit continues to move in the right direction. Now $455 million just in this most recent quarter.

A lot of that is personal loans. That's a book that they've grown significantly over the past two years. $4.9 billion in the third quarter of 2024. Third quarter of 2026, $12.6 billion.

Student loans also growing like crazy now. $2.9 billion in originations in the third quarter.

But look at the home loans business. This is the company going from these ancillary businesses that most banks don't really want to get involved in to the kind of core business that most banks are involved with on a day-to-day basis.

SoFi originated more home loans in the third quarter of 2026 than it did for all of 2023.

And they appear to be managing risk extremely well. This is the net charge off rates for personal loans in the top two lines and then student loans in the bottom line. So you can see those are trending in the right direction.

That means that the margins and the profitability of each of those loans is going to be better than expected. This is why the company is performing a little better than even management's guidance.

But this isn't the only growth engine that SoFi has. SoFi also has the financial services segment. Recently, this has been the biggest growth driver for the company. not quite the case anymore as personal loans have grown significantly, but 25% net revenue growth is extremely solid and contribution margin of 50% tells you that they're growing this business profitably as well.

So those are the two biggest segments that are going to drive not only members but also the number of products those members are using. Financial services and lending both of those growing extremely quickly.

But of course there is one flaw for SoFi that is the technology platform. This business has not worked out as management hoped. The thought here was that they were going to build technology, banking technology that they were then going to be able to license to other companies.

Great idea, but a lot of banks are actually doing this and it's a very competitive market and as their customers grow like Chime did in 2025. Some of those products and technologies they end up bringing in house.

So, they lost Chime. That's why revenue is down year-over-year. But you can see that it is starting to grow again. Management has a goal of growing that again at a 25% rate or so through the end of the decade.

We'll see if they're able to do that. This is the one segment if you look at their results quarter after quarter that continues to be a little bit disappointing.

But the huge takeaway if you're a SoFi investor is that management expects phenomenal growth to continue through 2027. So what you see here on the top is their guidance for 2026.

Increasing that guidance with just one quarter left in the year. Now expecting 5.04 billion worth of adjusted net revenue. Adjusted Ibita $1.66 billion. That would be up 57% from a year ago.

Earnings per share of 61 cents. That again up 56% from a year ago.

But really the bottom thing is what I think is catching a lot of investors offguard because this is now a company that is grown in size. It's harder to grow at 30 plus% rate. But they're expecting revenue to be growing at nearly a 30% rate. 27% is their guidance.

$6.4 billion worth of adjusted net revenue. Now remember management set usually sets those targets pretty low. So I would expect them to probably beat that long term. Adjusted EBIT expected to grow another 35% and an earnings per share up another 48% to 90.

And here's where the valuation starts to get really compelling for SoFi. Price to book book value is just 1.9. If you look at their price to earnings multiple on a forward basis, it's only about 18 based on that new guidance.

And remember, the company is still growing at an astounding rate. This is really the advantage of being a digital first company. Yes, they're taking a lot of bank risk, which a lot of banks are.

You can find cheaper bank stocks out there, but you can't find a stock that's trading for this kind of multiple that's growing this quickly. That's why investors should be taking a second look at SoFi.

Like I said, the stock's down nearly 50% over the past year, even after today's bounce. But with this kind of compelling valuation, there's a lot to like and shares.