After more than doubling in 2023, SoFi (SOFI) stock has looked weak this year, and is down 20.9% YTD. The fintech company will release its Q1 earnings before the bell on Monday, April 29. Can the report help reverse the slide in SoFi stock? We'll discuss in this article, beginning with a look at Q1 earnings estimates.

Wall Street analysts expect SoFi to post revenues of $558.7 million in Q1 – a YoY rise of 21.4%. These estimates are towards the upper end of SoFi’s guidance of $550 million-$560 million. It is expected to post a net income of $19 million, which again is towards the upper end of its guidance of $10 million to $20 million.

What to Watch in SoFi’s Q1 Earnings Call

Apart from the headline metrics, I would watch out for SoFi’s Q2 guidance, as well as any tweaks to the full-year forecasts. During the previous earnings call, management forecast GAAP EPS between $0.07-$0.08 for 2024. Additionally, it said that its tangible book value would grow by between $300 million to $500 million this year.

I would also look out for delinquency numbers, as the metric has been on the rise across the industry - specifically for borrowers in the low-income bracket. To its credit, SoFi has managed delinquencies quite well, and has pulled back on lending. However, with many low-income households now feeling the pain from the higher cost of living and macroeconomic slowdown, it will be crucial to watch the slippages in loans.

SoFi Stock Forecast

Wall Street analysts are not too bullish on SoFi heading into the earnings; of the 18 analysts covering the stock, only 5 rate it as a “Strong Buy,” while 1 analyst rates it as a “Moderate Buy.” Three analysts rate the stock as a “Strong Sell,” while the remaining 9 rate it as a “Hold.”

SoFi has a mean target price of $9.16, about 16.3% higher than Friday's closing prices, while its Street-high target price of $14 (via Truist Financial Securities analyst Andrew Jeffrey) represents a potential upside of 77%.

Earlier this month, Needham initiated coverage on SoFi with a “buy” rating and $10 target price, and said the company has the “right mix of growth and profits.”

SoFi Brings Profitable Growth to the Table

I would side with Needham there, as SoFi indeed brings the prospect of profitable growth to the table. Consensus estimates call for SoFi’s revenues to grow 14.9% in 2024 and 16.9% in 2025. Its profits are expected to rise even more sharply, and analysts expect its earnings per share to rise by 180% in 2024 and 225% in 2024.

To be sure, the increase is coming from a lower base - SoFi just turned profitable on a GAAP basis in Q4, and expects 2024 to be the first year when it will post annual GAAP profits. However, the company’s long-term growth trajectory also looks solid, and it expects GAAP EPS to rise between 20%-25% post-2026.

SoFi’s top-line growth is also expected to stay strong in the coming years, and the company forecast that its revenues will grow at a CAGR of 20%-25% between 2023 and 2026. It expects to grow its revenues at a fast pace, despite the slowdown in lending revenues.

SoFi Looks Like a Buy Ahead of Q1 Earnings

I believe SoFi stock looks like a buy ahead of its Q1 earnings. The stock trades at reasonable valuations – its price-to-sales multiple is 3.49x, while its price-to-book multiple is 1.35x. Looking at the forecasts provided by the company, the 2026 price-to-earnings multiple is below 10x at the top end of its 2026 EPS guidance. The multiple look decent, considering the kind of topline growth that SoFi expects to deliver.

Also, amid the slide in SoFi stock, the bar is now set quite low. That makes a post-earnings pop much more likely, especially considering the tepid valuations.