Digital financial services provider SoFi Technologies (SOFI) has been under fire from short sellers who believe it won’t be able to win business away from embedded-bank rivals, including Bank of America and Wells Fargo. As of the end of September, short sellers held 214.9 million SoFi shares short, representing 16.9% of shares outstanding, and up from 177.5 million shares at the end of August. However, the company’s third-quarter results, including the addition of a record 1.2 million members, and better-than-expected guidance for 2027, suggest SoFi is making more progress than short sellers expected. SoFi third quarter shows progress as it expands services SoFi began as a student loan specialist, but over the years, CEO Anthony Noto has transformed the company into more of a traditional bank, allowing it to grow deposits that provide cheap financing for personal and home loans. “In less than a decade, we have transformed SoFi from a single-product company into an everything financial app with eight different businesses each generating over $100 million in annualized revenue,” said Noto about the company’s third-quarter performance. Total membership rose 35% year over year to 17.1 million, fueling record revenue of $1.385 billion, up 44% from one year ago. Net income rose 73% to $241 million. Its net interest margin, the spread between lending rates and the cost of funding them, expanded 16 basis points to 6.14%. SoFi reported earnings of 18 cents per share, above Wall Street’s 17 cents estimate. The growth was driven by more members and greater demand for services, including financial services products such as SoFi Money, Relay, and Invest, which accounted for 88% of the quarter’s product growth. Lending demand was also solid, rising 39% to 3.4 million products across personal, student, and home loans. SoFi’s stock price surged after the third-quarter financials caught short sellers off guard. Sportico / Getty Images Guidance sparks short squeeze in SoFi stock as company is ‘cooking with gas’ Based on average trading volume, it would take 4.8 days to cover all the shares held short in SoFi at the end of September. It seems some of those bearish bets are flipping following the third-quarter results, given SoFi’s stock price jumped 14.6% at 12:16 pm EDT on 112.4 million shares, well above the stock’s normal average trading volume of 49.4 million shares. Stephen Guilfoyle is a long-term trader whose career stretches back to 1987 on the New York Stock Exchange. He’s a fan of CEO Noto’s push to expand SoFi into more products, and says the most recent performance shows SoFi is executing. “The financial services firm appears to be cooking with gas,” wrote Guilfoyle on TheStreet Pro. “Corporate execution has been excellent. The growth is outstanding.” Guilfoyle picked SoFi earlier this year as his ‘stock of the year’ for 2026, and up until now, he’s been wrong, given shares came into the earnings report down 45% this year. “I have been behind this stock for quite a while and caught a few snickers when I made it my ‘stock of the year’ for 2026,” said Guilfoyle. “My timing was obviously wrong regarding the stock-of-the-year selection.” Still, Guilfoyle remains a fan of SoFi stock, and the company’s guidance and outlook leave him optimistic that a corner has been turned for shareholders. “The quarter was excellent. The lending segment absolutely ripped the cover off the ball. Guidance is far better than a rational man could have hoped for,” said Guilfoyle. SoFi is targeting adjusted revenue of $5.04 billion this year, up 40% year over year. Next year, it expects revenue to climb 27% to $6.4 billion. On the bottom line, guidance is for 61 cents in 2026 and 90 cents in 2027, outpacing analysts’ 59 and 82 cents estimates. Guilfoyle’s SoFi stock price target is $24. Todd Campbell owns shares in SoFi Technologies at the time of this writing. More Stocks News AI chips are getting so hot, diamonds may be the answer Pepsi vs. Coca-Cola: Which Dividend King stock will outperform in 2027? Warren Buffett sends timeless advice to S&P 500 stock investors Palantir is one of just 3 crushed S&P 500 stocks up for the year
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