SoFi's Record Loan Originations Aren't Winning Over Wall Street. Here's the Disconnect.
Key Points
Truist’s Matthew Coad recently cut his firm’s price target for SoFi from $20 to $17.
SoFi's growth continues to be impressive, as its loan originations soared 68% in the first quarter.
The stock, which historically hasn’t been cheap, now trades at a forward price-to-earnings ratio below 30.
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During the first three months of 2026, SoFi Technologies (NASDAQ: SOFI) originated $12.2 billion in combined personal, student, and home loans. While this figure was up 68% year over year and established a new company record, it didn't please investors.
Matthew Coad, a research analyst at Truist Financial, cut the firm's price target for SoFi from $20 to $17. He expects weaker Q2 revenue from the loan platform segment.
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The downgrade was also the result of the company's technology platform segment registering a 27% revenue decline. This was due to the loss of an important client, although the total number of accounts fell 16% from Q1 2025.
Does the fintech stock's dip, a reflection of Wall Street's bearishly inclined perspective, leave a disconnect that investors can take advantage of by buying SoFi?
Image source: Getty Images.
With such outstanding growth, it's easy to be bullish
SoFi's first-quarter results add fuel to the bull case. Record loan originations propelled the business's top line, with adjusted net revenue up 41% year over year. The membership base expanded by 35% to 14.7 million.
Despite strong growth, investors are giving more weight to Truist's price target cut. This is despite upbeat data points coming from the company.
SoFi added $3.6 billion in new commitments from capital markets partners to fund personal loans. And demand has been better than expected. Loan platform business originations were up 90% compared to Q1 2025.
Maybe the market is concerned about SoFi's lending potential in a higher-for-longer rate environment. But the Federal Reserve's benchmark rate has been in the current range of 3.5% to 3.75% or higher since late 2022, and these tighter conditions haven't prevented the company from continuing to post superb growth.
Trends in the technology platform segment are less impactful because its first-quarter revenue of $75 million represented less than 7% of SoFi's total sales base. Management is still focused on innovation, though. The business plans to soon launch SoFi Technology Solutions, rebranding the tech platform segment.
"The new brand reflects the more comprehensive set of products and services that we now offer enterprise clients across a total of four platform businesses," CEO Anthony Noto said on the Q1 2026 earnings call.
Starting valuation impacts the fintech stock's investment case
SoFi historically hasn't been a cheap stock, which is probably why the market will worry at any hint of a slowdown. But now that shares trade 44% below their peak, investors can buy the business at a forward price-to-earnings ratio of 29.6.
I view this as a compelling entry point for prospective investors, especially given the likelihood that SoFi's earnings base will be meaningfully higher in the future. While analyst price targets get a lot of attention, investors shouldn't give them much weight.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Truist Financial. The Motley Fool has a disclosure policy.
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