By SoFi Technologies (NASDAQ: SOFI) silenced skeptics this morning, reporting “blockbuster” Q4 financials, with revenue exceeding the coveted “$1.0 billion” mark for the first time.
The financial technology specialist posted adjusted earnings of 13 cents a share – handily beating 11 cents per share that experts had forecast.
Still, SOFI stock remains down over 25% versus its November high.
Much of this hangover is related to a “massive” $1.5 billion capital raise the company announced last month that sparked dilution concerns.
Speaking with CNBC this morning, however, Anthony Noto – its chief executive – argued the raise is “misunderstood” as it may just prove the secret sauce for SOFI’s long-term dominance.
Why capital raise is actually positive for SoFi stock
While dilution concerns often see the market react to stock offerings with an initial sell-off, Noto confirmed the capital raise was purely “opportunistic” and not an urgent response to cash depletion
In fact, it was immediately “accretive to our tangible book value,” boosting it by $2 per share to an overall $7, he added.
On “Squawk Box”, the chief executive said the funding means “greater flexibility” for the Nasdaq-listed firm to “drive faster growth” through new offerings or strategic deals that “fortify” our footing against rivals.
By doubling its statutory required leverage ratio, the fintech now has “optionality to grow in any direction,” including aggressively growing its loan platform or cutting its high-cost debt to improve margins.
And that – most certainly – is bullish for SOFI shares, he concluded.
Noto’s take on why SOFI shares are worth owning
CEO Anthony Noto touted SoFi shares on CNBC, saying the company is in a “unique” position to benefit from both artificial intelligence (AI) and cryptocurrency tailwinds.
According to him, both blockchain and AI are “tech supercycles” that will define the next decade.
By integrating AI into their underwriting via the Galileo and Technisys platforms, SOFI is driving efficiency, while their recent launch of integrated crypto trading caters to a huge member demand.
Noto’s vision is to become a “one-stop shop” where sophisticated AI-driven financial advice meets the frontier of digital assets, creating a diversified ecosystem that traditional banks simply cannot replicate.
How to play SoFi Technologies after Q4 earnings
The case for owning SOFI stock is arguably stronger now than during its November peak.
With the company forecasting $4.66 billion in revenue for 2026 and a 30% increase in membership, its growth engine is really “firing on all cylinders”.
While SoFi Technologies is expensive compared to legacy banks at a price-to-sales (P/S) multiple of less than “9”, it’s a bargain compared to high-growth tech peers given its 160% year-over-year EPS growth in Q4.
Between the “Loan Platform” business scaling – where SOFI earns fees without the balance sheet risk – and the massive capital cushion now at Noto’s disposal, the company is perfectly positioned to capitalize on a stabilizing interest rate environment.
For investors, the “dilution” may soon look like a small price to pay for a fortress balance sheet.
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