Shares of the fintech company SoFi Technologies (SOFI +1.40%) rose in October after the company reported strong third-quarter results that beat Wall Street's consensus estimates. The record quarter also spurred SoFi's management to raise its annual profit forecast.
Investors have been bullish on SoFi as the company has transformed itself from a student loan refinancing company into a one-stop shop for all things finance. They weren't disappointed by the company's quarterly results and pushed SoFi stock up 12.3% last month.
Image source: SoFi Technologies.
A fintech that's firing on all cylinders
There was plenty for SoFi shareholders to be excited about in the company's third-quarter results, starting with the fact that adjusted earnings per share of $0.11 beat analysts' consensus estimates of $0.08. What's more, SoFi's revenue in the quarter rose 38% to a record $962 million, easily outpacing Wall Street's expectation of $904 million.
SoFi is benefiting from a continued expansion of its membership base, which rose 35% to 12.6 million in the quarter. Those members boosted their spending on loans in the quarter, with loan originations surging 57% to $9.9 billion from mortgages, student loans, and personal loans.
All of this positive momentum in the quarter caused SoFi's management to raise its annual earnings guidance to $0.37 per share, up from its previous estimate of $0.31. Clearly, investors were happy with SoFi's results in the quarter and with management's continued optimism for the remainder of the year -- as they should be. SoFi has continually proved that it can attract new members and successfully sell them an expanding list of financial services.
NASDAQ: SOFI
Key Data Points
Growth amid uncertainty
SoFi's financial results are impressive enough on their own, but they're especially noteworthy as some consumers have become concerned about tariffs and slowing job growth. For example, October job openings fell to their lowest level in more than four years.
SoFi isn't immune to economic uncertainty, of course, but the company's growth amid uncertainty is a good indication that it has built out a robust pipeline of financial services -- including credit cards, loans, checking and savings accounts, investing tools, etc. -- that could remain in demand no matter its members' financial situation.
That said, SoFi shareholders should keep a close eye on what's happening with the economy in the coming quarters to see if recent reports of layoffs and tariff concerns change the current growth trajectory SoFi's enjoying.
