SOFI Earnings Preview: The GOOD Robinhood?

Published August 12, 2021

SoFI Technologies (SOFI) reports earnings on Thursday, August 12, 2021 after the market close.

SOFI is one of the most important names in the #memestock universe.

Why? Because it's one of the few #wallstreetbets names that feels like it could be a giant.

About SoFi Technologies (SOFI)

SoFi is a new breed of financial institution with an online-first model. SoFi offers everything from checking to savings to trading to mortgages to crypto services. 

SOFI
SoFi Technologies, Inc.
NasdaqGS
$5.28
$0.12
2.22%

SOFI is also the rare SPAC (special purpose acquisition corporation) that feels promising. We've even heard people call it "JP Morgan for millennials." Obviously, we can't see in the future, but the SOFI story could be very bright.

Here are the consensus estimates according to Yahoo! Finance.

Header

Consensus Estimate

High Estimate

Low Estimate

Revenues

$231M

$236.8M

$225.2

Earnings Per Share

-$0.04

-$0.04

-$0.05

There is a MAJOR twist to the estimates - we will get to that below.

SoFi recently merged with Chamath Palihpitya's Social Capital Hedosophia to IPO and trade with the SOFI ticker. 

Chamath has supported two other meme stocks on our #wallstreetbets index: Clover Health (CLOV) and Virgin Galactic (SPCE).

There are a lot of questions over SOFI's valuations. The company is unprofitable and trading 13 times more than its yearly expected sales. However, this isn't completely crazy by growth stock standards - as long as the growth continues.

And speaking of growth, SOFI has been on a tear, adding customers like crazy:

In Q1 of 2021, Additionally the company reported 121% year over year (YoY) growth in total products and 273% for financial services products. Additionally, SOFI saw 151% YoY growth in revenue at $216M and a $70 million improvement in EBITDA.

So expectations feel like they're pretty high - even with SOFI well off its crazy highs from early in the year:

But here's where things get tricky. See those consensus estimates above? They're from only 2 analysts! So It's hard to figure out what event constitutes a "good" quarter.

Recent #memestock Earnings

In the past week, we have seen more meme stocks report earnings. AMC (AMC) beat expectations and rose, but couldn't hold its gains.

Microvision (MVIS) beat analysts’ revenue expectations by 49.2% but disappointed with a a big earnings miss. Yet the stock rose 17% the next day.

Clean Energy Fuels (CLNE) reported earnings on 8/5 and missed analysts’ revenue estimates by a mile. The company did report EPS of $0.01, beating slightly. The stock popped 6% the next day.

Palantir (PLTR) reported a huge beat this morning and is up.

So hopefully, SOFI can follow the MVIS/CLNE/PLTR path.

The Implied Move Based on Options Prices

As we're writing this, SOFI is at $16.90. The $17 straddle expiring on 8/13 (the day after earnings) is priced at about $1.67.

So traders are pricing in a move of about 10% by Friday's close. 

The "GOOD" Robinhood

On July 29, SOFI competitor Robinhood (HOOD) IPO’d and became an official meme stock.

However, HOOD is a controversial name in the #wallstreetbets community because of its payment for order flow policies. 

So it will be interesting to see if the apes view SOFI as the "GOOD" HOOD.

And it's not like SoFi is a fallen angel like many other meme stocks. SOFI has a huge product line and many branches of revenue.

Stock prices are not the same as valuations. But #memestock traders might see SOFI under $20 as a very cheap alternative to the $50+ HOOD.

The Bottom Line

SOFI appears to have a lot of potential. But it's put up or shut up time. Let's go!

Where do you think SOFI is going? Let us know in the comments section!

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