Sofi is Cooked?

So, Fi has been getting hit this week and here's how I see it. The business didn't suddenly fall apart, the market is pushing back on the valuation. At a stock price of about $16.60, SoFi is still trading at a PE ratio of roughly 37.6. That's not cheap, especially when investors are becoming more selective about growth stocks. SoFi reports earnings on July 29th and analysts are expecting around 11 cents per share. Here's the important part, if SoFi simply meets that estimate and the stock at 1660, it's trailing PE could fall from about 37.6 to roughly 35.2. That helps, but it doesn't fixed the valuation problem. A PE of 35 still means investors are paying a premium and expecting strong future growth. Meeting expectations probably isn't enough to send this stock significantly higher because those expectations are already priced in. For to make a major move, I think one of three things need to happen. They need blow out earnings and raise guidance, announce a meeting for new product or growth catalyst, or keep growing earnings over the next several quarters while the stock price consolidates. I'm still bullish on long term, but right now patients may be required. A good earnings report can improve valuation, but only exceptional results are likely to change the story overnight.