SOFI DOWNGRADE & EARNINGS UPDATE. WHAT I NEED TO SEE!

SOFI stock reported favorable 2Q 2023 earnings causing the stock to lurch higher. In this video I discuss SOFI's earnings, why the stock reacted favorably at first, as well as its valuation.

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[unrivaled]

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[charlotte]

*I started investing when I was 27, mostly through sweat equity. I just turned 33, and this last month was the first time that my passive income broke $100, 000 for the month. This is solid advice! DO IT!*

[trentslayton]

I’m glad I bought in at around 4.70$ cost basis. I trust the management and plan to hold the stock long term.

[dooleygng]

One of the best stocks to buy long-term. Tremendous management team and execution. Watch this space… this stock will surprise many doubters, and I look forward to witnessing that

[mjregan]

Don’t know why people talk about the profitability. They’ll be profitable by Q4 with ease. When personal loans come down (when rates do), they’ll simply get home loans and student loans back and more volume of personal loans. They also have very high FICO score loans. They simply pivot to what the market is giving them in the economy — this isn’t a normal company that is blind to the economy and rates. They have weathered the current economy more than any other company. The delinquency for high FICO is far lower so having people over 740 is very high. Profitability literally comes in 2 quarters - it’s not IF, it’s when. They’ve also said expect Galileo to increase over the coming quarters. Which I trust

[jepook]

Higher cost than the big banks? How do you figure that? They are 100% online, no brick and mortars, the rents fixtures utilities or staffing that goes with them. Those loans once the Fed stops hiking are going to be worth a ton.

[mohddulal]

Why don't you start a teaser position? As most of your holdings seem to be...

[sirjoelhaaf]

Sorry, but you have some flaws in what you saying. They have a much lower cost structure than brick and mortar banks and that significantly offsets their interest payments to depositors. Also your historical default chart on personal loans showed 5% as the historical high point!! SOFI is accounting based on 4.6% default rates with much higher credit score consumers…so you’re statement makes no sense.

[robertoc.j.]

Thanks for sharing Daniel. I hope you get well soon.

On regards to SoFi's SBC take a deeper look at it. It is my understanding that the bulk of it is performance based. With stock price targets of $25, $35 and $45 by 2025 to actually be granted. Due to accounting practices they still need to have it reflected as expense from the moment they were agreed until 2025.

[Martin_Gark]

Get well soon Daniel! Thanks for making the video despite being unwell

[b.sharp.]

If you're using anything other than Sofi to buy sofi stock, you really gotta question your bull thesis

[cutitr]

Interestingly Warren Buffett Berkshire Hathaway invested in NUbank when they were not yet profitable and their loaning business is much riskier than SOFI (unbanked population). SOFI borrowers on the other hand are high FICO score among the industry. If recession hits, what damage it would do to neo and legacy banks with loan borrowers have low FICO score? No guarantee to all but at least one with high FICO score would have a better chance to withstand the financial roller coaster.

SOFI today would offers you a company with better loaning business and at price which is lower than what Buffet had paid for NUbank.

[clausbohm]

They do this every time. so even AI knows better then most analysts on this stock.

[LDP..]

every time i come back to this channel i am amazed you don't have 1 million subs !! Great breakdown of the stock !! Love your neutral look .
Been Dca'ing on the stock on monday and waiting to buy back in

[minerva-]

Daniel, thank you for this great video. Totally agree. I do not see Sofi becoming profitable in the short term. I'm constantly reading Q4 2023, but isn't that almost impossible? Free cash flow TTM is negative 7 Billion. Yes, with a B. They have over 6 billion in debt. Short interest is almost a billion, so it doesn't seem to me that this is a bullish signal. This stock is going down. How can sofi say they will become profitable....

[hurricanelopez]

I am personally a huge sofi bull but this was a very reasonsble take on sofi.. i like that you keep an open mind and are fair. I own a ton of sofi 3x my position down by 5. I think you miss the long term potential of galileo.. but overall excellent presentation.

[aaronlee]

So another bank downgraded a bank? Short much?

[chenfei]

A deep analysis, very insightful, really appreciate it. Previous video on Enphase was also top notch. Mr. Daniel, please keep up the great work!

[mjregan]

Additionally, SVB didn’t have management like SOFI. Plus, there was mostly businesses and couldn’t be covered more than $1M. SoFi won’t have insurance issues

[jonathanlee]

Dan, more pre-release analysis would be useful for earnings. For example, technically and legally, if NVIDIA's earnings come in below expectations, does it have enough cash to promise a stock buyback (in order to avert a crash in its stock price)