SoFi Technologies Inc (NASDAQ: SOFI) stock experienced a downturn on Tuesday, retreating despite a positive reassessment from JPMorgan. The financial services company, known for its technology-driven lending and financial products, registered a decline in share price following an analyst upgrade and an optimistic forecast for future growth.
JPMorgan analyst Reginal Smith upgraded SoFi’s rating from Neutral to Overweight on Tuesday, advocating a price target of $31 per share. This represents an estimated upside of approximately 40% from the current trading levels. Smith’s evaluation stems from the company’s solid operational momentum, including record pace in new member acquisition and deposit growth.
SoFi posted impressive fourth-quarter earnings, marking record results and issuing full-year adjusted EBITDA guidance that surpassed prior expectations. Despite the stock's recent 10% drop following this announcement, JPMorgan remains confident, emphasizing the company’s position relative to its fintech peers. While certain competitors encounter deposit outflows or stagnant memberships, SoFi continues to expand both metrics robustly.
JPMorgan’s revised financial outlook now anticipates that SoFi will achieve earnings per share of 61 cents in 2026, improved from an earlier estimate of 56 cents, and 77 cents in 2027, slightly up from 75 cents. The elevated price target leverages a 1.5 times price-to-earnings-growth (PEG) ratio applied to the 2027 earnings estimate, which remains marginally below the company's historical trailing twelve-month average.
Looking ahead, SoFi’s full-year 2026 guidance reflects an ambitious 30% revenue growth coupled with 34% adjusted EBITDA margins. These targets not only indicate accelerated growth compared to 2025 but also suggest more than 50% incremental margins. The company also plans to significantly expand its member base, aiming to enroll 4 million new members in 2026, an increase from the projected 3.5 million additions in 2025.
However, there is a degree of uncertainty embedded in the near-term outlook. The guidance for the first quarter of 2026 falls somewhat short of consensus analyst expectations. It anticipates incremental adjusted EBITDA margins in the low 30% range and signals that higher profitability will likely materialize through a more pronounced second-half ramp. This projection considers aggressive investments in marketing and product innovation scheduled for the early part of the year.
JPMorgan analyst Smith expressed continued confidence, referencing SoFi’s history of surpassing its own forecasts. Specifically, the company exceeded Street adjusted EBITDA estimates by 18% in both the first quarter of 2025 and 2024, demonstrating a pattern of operational overperformance.
On the trading floor, SoFi shares were down 3.58% at $21.29 during Tuesday’s session, reflecting market skepticism amid the juxtaposition of strong long-term prospects and cautious near-term predictions.