SoFi Just Had Its "Best Year Ever": Here's Why the Stock Is Plunging Anyway

Core Viewpoint - SoFi's stock experienced a significant decline despite reporting strong fourth-quarter earnings, primarily due to management's guidance for future revenue and earnings per share [1][2]. Group 1: Financial Performance - SoFi reported better-than-expected earnings for the fourth quarter, with strong headline numbers that exceeded expectations on both revenue and earnings [1][2]. - The company added 785,000 members in Q4, marking an all-time high for member growth [4]. - SoFi's loan platform originated $1.1 billion in personal loans for third parties in Q4, surpassing the total from the first three quarters of the year combined [4]. - The net interest margin increased from 5.57% in Q3 to 5.91% in Q4, attributed to lower costs on interest-bearing deposits [4]. Group 2: Future Guidance - For 2025, SoFi expects revenue to be in the range of $3.2 billion to $3.275 billion, which is significantly higher than analyst consensus estimates [2][3]. - The earnings per share guidance for 2025 is projected to be between $0.25 and $0.27, which is considered lower than what investors had anticipated [2][3]. - The combination of higher revenue expectations and lower profit projections suggests a potential decrease in profit margins, contributing to investor concerns [3]. Group 3: Partnerships and Credit Quality - SoFi signed several new partnership deals for its Galileo tech platform, including a significant partnership with the U.S. Treasury to serve as the processing partner for Direct Express [4]. - The company's credit quality showed improvement, with annual personal loan charge-offs decreasing by 15 basis points [4].