SoFi Technologies stock has come under significant pressure this year, underperforming the broader market despite the company reporting strong financial results. The stock fell to $14.70 on Tuesday, its lowest level since June last year and 55% below its 2025 peak.
Consequently, its market capitalization has plunged from $39.1 billion to $18.9 billion. Worse, the stock has formed a risky technical chart pattern that points to further downside in the near term.
SoFi Technologies to publish its earnings report
SoFi, one of the most popular fintech companies in the US, has sold off this year, even after releasing financial results this year. Its second-quarter earnings report showed that its net revenue jumped by a whopping 40% to $1.2 billion. This growth is important because it was organic and was driven by the genuine demand for its products.
SoFi Technologies grew its member numbers by 35% during the quarter to 15.8 million. It added 1.1 million new members, while the number of products soared. That is a sign that customers are finding its products useful.
Its revenue jumped to $1.2 billion, while its adjusted EBITDA moved to $358 million. Notably, the company delivered its eleventh consecutive quarter of adjusted profitability, with the figure rising to $160 million.
SoFi’s main strength is the quality of its platform, which is made up of several products that anyone can use. Its products include credit cards, student loans, investment solutions, insurance, and crypto trading.
It has continued launching new products, including SoFiUSD, its stablecoin that has gained over $349 million in assets. It also launched SoFi Coach, SoFi Tech Solutions, and Small Business Loans in the second quarter.
Analysts see SoFi’s growth continuing
Most analysts are optimistic about SoFi’s growth prospects. The average estimate among analysts is that its third-quarter revenue rose by 32% to $1.26 billion. It is then expected to make $1.32 billion in the fourth quarter, up by 30% from the same period last year. If this is correct, its annual revenue will come in at $4.8 billion.
SoFi’s annual earnings-per-share is also expected to move from 37 cents to 59 cents. Chances are that the company’s final result will be stronger than this.
Still, despite these fundamentals, SoFi’s performance has not been good, and its short interest has jumped to 16%. One of the main reasons for this is the rising bond yields, which are tightening credit spreads. Another one is that it received a short-seller report that accused the management of exaggerating returns.
SoFi stock technical analysis
SoFi stock chart | Source: TradingView
The daily chart shows that the SoFi stock price has been in a strong sell-off in the past few months. It has recently dropped below the 61.8% Fibonacci Retracement of $17.85.
A closer look shows that the stock has formed an inverted cup-and-handle pattern and is now in its lower side. This pattern normally leads to more downside.
SoFi has remained below the 50-day moving average and the Supertrend indicator. Therefore, these patterns suggest that the stock will continue falling, potentially to the 78.6% retracement level of $13.7.
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