SoFi Technologies analyst report

What happened: SoFi Technologies (SOFI) CEO Anthony Noto recently emphasized that the company should be valued like a software stock, given its 18 consecutive quarters of Rule of 40 strength. This comes as SOFI, a digital financial services provider, has historically been valued like a traditional financial institution. Meanwhile, an analyst report highlighted SOFI's profitability growth, noting that it has achieved this without compromising on margins.

Market impact: This narrative shift could lead investors to re-evaluate SOFI's valuation, potentially pushing its stock price higher if it's indeed seen as more akin to a high-growth tech company. This could also impact other fintech stocks that blend technology and financial services, such as PayPal (PYPL) and Square (SQ).

What to watch next: Investors should closely monitor SOFI's Q2 earnings, scheduled for August 8, 2023, to see if the company can maintain its Rule of 40 strength and profitability growth. Additionally, any changes in SOFI's valuation multiples, particularly its P/S ratio, could indicate if the market is indeed starting to value it more like a software stock.