SoFi Technologies (SOFI) stock could have room to recover as the company’s expanding deposit base delivers a substantial funding advantage that may support earnings growth through 2026.
SoFi shares closed at $18.29 on Friday, August 14, after declining 0.76%. The move came as the broader S&P 500 fell 0.17%, while the Russell 2000 gained 0.51%. Despite the modest pullback, the financial technology company continues to show strong operating momentum, with lower-cost deposits emerging as an increasingly important component of its earnings strategy.
The company estimates that using deposits rather than warehouse financing could reduce its annualized interest expense by approximately $712.6 million. That figure is particularly significant because it represents roughly 44.5% of management’s $1.6 billion adjusted EBITDA target for 2026.
SoFi’s deposit franchise has expanded rapidly, giving the company access to a cheaper source of capital for its lending operations.
During the second quarter, deposits reached $45.5 billion, increasing by $5.3 billion from the previous quarter. Deposits represented more than 90% of average liabilities, highlighting how important this funding channel has become to the company’s business model.
The cost advantage is also meaningful. SoFi’s deposit funding cost was 156 basis points below warehouse financing during the period. Lower funding expenses can potentially allow the company to retain more of the revenue generated from loans, provided credit performance and loan yields remain supportive.
However, the $712.6 million figure should not be interpreted as an immediate addition to reported earnings. It is an annualized estimate based on funding economics, meaning the eventual benefit could change depending on deposit pricing, interest rates, loan performance and other financial conditions.
The company reported $1.219 billion in second-quarter GAAP net revenue, representing a 43% increase from the same period a year earlier. GAAP net income climbed 61% to $156.6 million, while adjusted EBITDA rose 44% to $357.8 million.
Loan activity was also strong. Total originations increased 69% to $14.8 billion, while the company’s membership base expanded 35% to 15.8 million.
SoFi is also attempting to deepen relationships with existing customers rather than relying exclusively on new-member growth. The company reached 1.54 products per member during the quarter, a record level. Existing members accounted for 51% of new product openings, up from 35% a year earlier.
That shift could become increasingly valuable because adding more products to existing customers may allow SoFi to generate additional revenue without carrying the same acquisition costs associated with attracting entirely new users.
The combination of improving profitability, deposit growth and stronger customer engagement could give SOFI stock an earnings narrative that extends beyond loan growth.
According to the figures provided by MarketBeat, the average analyst price target is $22.44. Based on Friday’s $18.29 close, that implies potential upside of approximately 22.7%.
Still, analyst sentiment remains mixed. Of 20 analysts tracked, seven have a Buy rating, 10 recommend Hold and three rate the stock Sell. Price targets range from $15 to $35, underscoring the uncertainty surrounding SoFi’s future performance.
For investors, the $713 million funding benefit could therefore be an important part of the bullish case. If deposits continue expanding and funding costs remain favorable, the company could have more room to convert revenue growth into earnings.
The post SoFi (SOFI) Stock; Eyes Upside as $713M Funding Boost Supports Earnings appeared first on CoinCentral.
