Shares of red-hot fintech SoFi Technologies (SOFI 3.69%), which more than doubled in 2023, are stumbling out of the gate in 2024. After sliding 3% on Jan. 2, the first trading day of the New Year, SoFi fell further Wednesday morning, with the stock losing an additional 13.5% through 11:35 a.m. ET.

I blame investment bank Keefe, Bruyette & Woods for that.

Easy come, easy go

From a share price below $5 at the start of last year, SoFi stock raced past $10 a share in the closing days of 2023. But investors may have become just a wee bit irrationally exuberant about this unprofitable fintech, as Keefe, Bruyette & Woods pointed out in a downgrade covered on StreetInsider.com this morning.

On the one hand, admits the analyst, it's "possible" that when SoFi next reports earnings, it will turn out that SoFi made its first-ever profit (despite never having been profitable before). But this is a question that "remain[s] heavily debated" among analysts. And in KBW's view, at least, "There are more downside scenarios to this outcome than upside." Even if SoFi does earn a profit in Q4, it may be one that the internet bank is unable to sustain.

More likely, in KBW's view, is that SoFi will generate only $2.3 billion in revenue this coming year (10% below consensus forecasts), and that its earnings before interest, taxes, depreciation, and amortization (EBITDA) will be about $493 million, which is 17% below estimates -- in which case everything after the "B" could still force SoFi into a loss on the bottom line.

2024...and 2025

If KBW's calculations are correct, SoFi's EBITDA will be about $80 million less than what other investors are expecting SoFi to report this year, which -- according to forecasts collated by S&P Global Market Intelligence -- would be a big enough miss to guarantee a net loss in 2024.

The good news, though, is that SoFi can still get very close to profitability this year even if Keefe, Bruyette & Woods is right. And if that's the case, it becomes even more likely that SoFi will report positive profits in 2025. The question then becomes whether 2025 forecasts (which call for a profit of more than $250 million) make SoFi stock a bargain at an implied valuation of 37 times its profits...two years from today.

I don't know the answer to that question. But with analysts forecasting 60% earnings growth in 2026 and 65% growth in 2027, the one thing I do know is that a lot of smart bankers think this particular internet bank is still growing like wildfire and has a bright future.

I wouldn't bet against SoFi today just on Keefe, Bruyette & Woods' say-so.