SoFi's Deposits Aren't A Moat: They're A Rate Hedge

SoFi Technologies, Inc. remains a Buy as the business pivots toward fee-based revenue and leverages its deposit base as a rate hedge. Management raised 2024 revenue guidance to $4.75–$4.85B but held profit targets flat, reinvesting incremental revenue into growth initiatives. Fee-based revenue reached 39% of total, with the Loan Platform Business enabling growth without adding credit risk to SOFI’s balance sheet. Key risks include continued share dilution, rising capital needs, and the need for incremental margins to rebound above 30% in coming quarters.

SoFi Technologies, Inc. ( SOFI ) reported its second-quarter earnings on July 29 that beat expectations on both the top and bottom lines, yet it closed the day down about 9%—not the reaction one