Quick Read
SoFi and Upstart each remain down 33% year to date despite Wednesday’s rally, as falling Treasury yields rather than any company news drove the 6 to 8% fintech rebound.
FINX sits down 12% year to date, and Upstart’s 0.6% fund weighting means even an 8% single-day surge barely registers at the portfolio level.
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Fintech names are rebounding at midday Wednesday. SoFi Technologies (NASDAQ:SOFI) stock is up 6% to $18.66, Upstart Holdings (NASDAQ:UPST) stock is up 8% to $31.58, and Affirm Holdings (NASDAQ:AFRM) stock is up 7% to $78.55. The move follows a sharp retreat in long-end Treasury yields.
The Treasury Department stated it would increase buybacks of long-dated government debt “by at least double” for securities from the 10-year to 30-year sector. The 10-year Treasury yield fell 5 basis points to 4.65%, and the 30-year yield declined 8 basis points to 5.2% after hitting its highest level since 2007 earlier this week.
Lower long-end yields tend to help consumer lenders and high-multiple growth names. That backdrop is the most plausible driver of Wednesday’s bid across fintech. No company-specific catalyst has emerged for the SoFi Technologies move today, so this reads as a sector rebound tied to the rate move rather than fresh company news.
The Gap Between SoFi’s Business and Its Stock
SoFi Technologies stock is up 6% at midday. The shares are still down 33% year to date through Tuesday’s close. One session doesn’t close that gap.
The business tells a very different story. In the second quarter, SoFi Technologies posted revenue of $1.2 billion, a quarterly record, alongside adjusted net income of $160 million, up 65% year over year, for a net profit margin of 13%.
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Management projects SoFi Technologies’ adjusted earnings per share rising at an annualized pace of 40% at the midpoint from 2025 to 2028. With no physical bank branches, the firm keeps overhead low and can cross-sell additional products to existing customers as banking relationships deepen. At a forward P/E ratio of 30x, SoFi Technologies shares aren’t cheap, but the growth math supports a premium multiple if the plan holds.
The context still matters on the profitability story. The fourth quarter of 2023 was the first period in which SoFi Technologies reported positive earnings under generally accepted accounting principles, so the current profit trajectory is relatively young. That is a reasonable argument for measured position sizing, even after a record quarter.
