This Is the Main Thing to Look for When SoFi Reports Earnings on April 29, and It's Not What You Think
Key Points
SoFi stock is down this year after several years of strong performance.
It was recently hit with a short-seller report that alleges accounting malpractice.
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SoFi Technologies (NASDAQ: SOFI) stock had a pretty strong run before it tanked this year. But all great stocks have their ups and downs; it's important for investors to ride out the volatility and hold on to great stocks to achieve long-term success.
Part of what's going on is that Muddy Waters Research released a short-seller report detailing allegations of financial engineering and crooked accounting. When SoFi releases its 2026 first-quarter earnings on April 29, here's what you should pay attention to.
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Investors already expect strong growth and improving profits. SoFi has been adding new customers at a rapid pace, and it typically beats on both the top and the bottom lines.
In light of the report, investors should note SoFi's personal charge-off rate. Muddy Waters made several claims, including that SoFi reports an artificially lower personal loan charge-off rate of 2.89%. It calculates the "real" rate at 6.1% and alleges that SoFi takes several actions to make it appear lower, including eliminating bad loans just before the charge-off threshold and keeping defaulted loans off its balance sheet.
Down the line, that produces $259 million in fair value gains on personal loans, or 25% of what it reported as adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2025, a significant inflation. In fact, Muddy Waters claims that the reported 2025 EBITDA is inflated by a total of 90% due to improper accounting practices.
While management denies all of the allegations, investors should pay attention to SoFi's personal charge-off rate and, more importantly, if there are any resolutions about the report's claims.
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Jennifer Saibil has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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