By almost all measures, shares of SoFi Technologies (SOFI +2.05%) should be up today. The online bank's Q1 revenue of $1.1 billion was up 41% year over year, topping expectations of $1.05 billion. And, per-share earnings doubled from a year-ago comparison of $0.06 to $0.12 for the three months ending in March, in line with analysts' estimates. Several internal records were also set last quarter. SoFi maintained full-revenue guidance of around $4.66 billion as well, up 29% from 2025's top line.
Nevertheless, as of 11:58 a.m. ET Wednesday, SoFi's stock is down 13.8%, unwinding the budding recovery from a sell-off that began dragging the stock lower late last year. The market just didn't like a handful of numbers from the company's first quarter report.
What went wrong
One of the stumbling blocks is SoFi's fee-based revenue such as brokerage services, platform fees, and loan originations. While fee revenue grew 23% to $387 million, that still fell short of analysts' expectations of $405 million.
Image source: Getty Images.
Revenue directly generated by its banking-as-a-service technology platform also fell 27% year over year, after Chime discontinued its third-party use of the digital banking solution. And, in light of turbulence that other banks are currently experiencing on this front, the lack of detailed discussion of SoFi Technologies' private credit business may be a red flag for investors.
Then there's the more philosophical worry. Uncharacteristically, SoFi's management didn't raise its guidance, as it had in most quarters leading up to this one. The market is interpreting this decision as a sign that headwinds are blowing more firmly now than they have been of late.
Time to bet against the crowd
The knee-jerk response is understandable -- this isn't the sort of earnings report that investors are accustomed to seeing from SoFi Technologies.
Just don't fixate so much on the disappointing aspects of Q1's report that you look past the fact that loan originations grew 16% to a record of $12.2 billion during the quarter in question, while SoFi's customer headcount improved 35% year over year to 14.7 million members.
NASDAQ: SOFI
Key Data Points
Also bear in mind that, already down 40% from November's high before today's tumble, most (if not all) of today's concerns may have already been baked into the stock's price.
There's still risk here to be sure. Today's sizable tumble, however, may also serve as a much-needed capitulation for the stock.
