SoFi Technologies (SOFI) built its name by disrupting traditional banking, offering digital lending, investing, and financial services. In 2024, it thrived, with its member count soaring past 10 million, along with revenue and earnings that beat expectations. CEO Anthony Noto called it “SoFi’s best year ever.”
But 2025 delivered a jolt. Despite strong fourth-quarter earnings, investors fixated on SoFi’s guidance, and the stock plunged 10% on Jan. 27.
SoFi remains confident, projecting 2.8 million new members in 2025, yet skepticism lingers. So, is this a knee-jerk reaction or a red flag? With SoFi’s long-term vision intact but investor expectations wavering, should investors view this dip as a buying opportunity, hold steady, or cash out before the market resets expectations?
About SoFi Technologies Stock
San Francisco-based SoFi Technologies (SOFI), valued at a market capitalization of $17.1 billion, is redefining banking across the U.S., Latin America, and Canada. It offers solutions for everything from loans and credit cards to investing and insurance.
SoFi’s stock has been on a tear, surging 59.6% in 2024 and outpacing the S&P 500 Index ($SPX) by a wide margin. The Federal Reserve’s rate cuts served as tailwinds, easing lending pressures and fueling consumer loan demand. After a blistering 133% rally in six months, SoFi hit a 52-week high of $18.42 on Jan. 21, only to stumble post-Q4 earnings on cautious 2025 guidance.
SoFi’s meteoric rise is hard to ignore, but its valuation remains a sticking point. Trading at 63.46 times forward adjusted earnings and 6.27x sales, SOFI commands a premium.
Yet, this is not just another financial firm. SoFi is scaling at a pace its peers can’t match. The recent pullback offers a window for bold, long-term investors betting on its disruptive momentum.
SoFi Q4 Results Surpass Expectations
On Jan. 27, the company unveiled stellar Q4 earnings results, surpassing expectations with a record $739.1 million in revenue, soaring 24% year over year. This surge was fueled by 52% combined growth in financial services and its tech platform, now accounting for nearly half its revenue. The company’s strategic pivot toward capital-light, high-return-on-equity, cash-driven fee-based revenue streams is paying off. Its adjusted EPS rose 150% annually to $0.05.
Meanwhile, with a member base surpassing 10 million - a 34% annual increase - SoFi continues to redefine growth. Its user base has grown tenfold over the past five years, and the company added a record 785,000 new members in Q4 alone. Product growth mirrored this trend, with 1.1 million new additions in Q4, pushing the total to 14.7 million, up 32%. Notably, financial services products accounted for 89% of this growth, reinforcing SoFi’s calculated transition away from traditional lending toward fee-based revenue streams.
The company’s diversification strategy paid off, with fee-based revenue hitting a record $970 million, up 74% from 2023. SoFi’s focus on boosting monetization is showing results, with financial services revenue per product increasing by 37%. This upward trend is expected to persist into 2025 as SoFi’s new products mature.
SoFi’s lending business is also evolving. Instead of holding or selling loans outright, it now partners with buyers, originating loans that meet predefined criteria while earning fee income. This approach enables SoFi to scale without increasing risk, all while retaining servicing rights for cross-selling opportunities. Meanwhile, its banking operations continue to strengthen. Since obtaining a bank license in 2022, SoFi has amassed $26 billion in deposits, capitalizing on a 193-basis-point spread that translates to $500 million in annual interest expense savings.
However, despite SoFi’s stronger-than-anticipated Q4, its 2025 guidance left investors unimpressed. Management projects adjusted revenue between $3.2 billion and $3.275 billion, and projected EPS of $0.25 to $0.27 was below analysts’ expectations.
Analysts tracking SoFi forecast its profit for 2025 to surge 86.7% year over year to $0.28 per share, and grow by another 85.7% to $0.52 per share in 2026. Meanwhile, revenue is anticipated to grow by 21.8% annually to $3.17 billion in fiscal 2025, rising further by 18.2% to $3.75 billion in fiscal 2026.
What Do Analysts Expect for SoFi Stock?
After SoFi's Q4 result, Needham turned even more bullish on SoFi, lifting its price target to a Street-high $20 from $13, implying upside potential of 26.7%. Needham also reaffirmed a "Buy" rating. The firm sees SoFi’s pullback as an opportunity, citing its blockbuster Q4, impressive stock rally over the past year, and a strategic shift toward capital-light revenue.
Wall Street analysts currently have a “Hold” consensus rating on SOFI. Out of the 19 analysts in coverage, five recommend a “Strong Buy,” one advises a “Moderate Buy,” eight analysts maintain a “Hold” rating, three give a “Moderate Sell,” and two suggest a “Strong Sell.”
Despite the recent SOFI stock dip, shares trade at a premium to the mean price target of $13.28.
