San Francisco, CA – SoFi Technologies, Inc., a financial technology company based in San Francisco, California, reported strong financial results for the first quarter of 2024. Despite positive outcomes, the company’s shares experienced a pre-market decline of approximately 6%, which may seem illogical given the significant growth in SoFi’s customer base. Investors may have expected higher revenue guidance for the fiscal year 2024, but the sell-off remains puzzling considering SoFi exceeded expectations.

During the first quarter, SoFi saw noteworthy growth in net customer acquisition, adding a substantial 600,000 new members to its platform. The company also raised its adjusted EBITDA forecast for fiscal year 2024 due to a resurgence in the student loan origination business. With a promising growth trajectory, SoFi presents an appealing value proposition for investors, potentially reaching 10 million customer accounts by the end of the current fiscal year.

The solid performance of SoFi in the first quarter exceeds analyst estimates, showcasing $0.02 per share in GAAP earnings on adjusted revenues of $580.7 million. The company’s earnings surpassed expectations by $0.01 per share, with revenues exceeding estimates by $21 million.

One of SoFi’s key strengths lies in its continuous success in customer acquisition, evident by the record 8.1 million members on its platform at the end of the first quarter. With a significant increase of 622,000 new customers during the period, SoFi is on track to achieve further growth, potentially reaching 10 million accounts by the end of the year and 13-14 million accounts by the end of fiscal year 2025.

The restart of the student loan origination business following the end of the repayment moratorium in fiscal year 2023 has contributed to SoFi’s growth, with a 43% year-over-year increase in the first quarter. This rebound in student loans, along with growth in other product categories like home loans, has led to an optimistic forecast for fiscal year 2024.

SoFi has revised its adjusted EBITDA guidance for 2024 to a range of $590-600 million, signaling a positive outlook. Additionally, the company projects increased revenues to a range of $2,390-2,430 million, aiming for profitability on a full-year basis in fiscal year 2024.

Considering SoFi’s robust customer acquisition momentum and the normalization in student loans, the company’s valuation remains attractive at a P/S ratio of 2.8X. With a strong growth potential and a focus on expanding its customer base, SoFi presents a compelling investment opportunity.

While SoFi faces risks such as a potential slowdown in customer acquisition rates and minimal profitability, the company’s overall performance in the first quarter indicates a promising outlook for investors. With increased adjusted EBITDA forecast and continued growth in various business segments, SoFi remains a solid recovery investment in 2024.