Since it went public a few years ago, SoFi Technologies (SOFI 1.12%) has taken its investors on a volatile ride. That pattern continued over the past 12 months. Since March 2024, the fintech stock was up 45% as of March 4, 2025. But it has also dropped by 27% from its 52-week high.
Regardless of the oscillating price action, there’s a lot to like about this business. But is SoFi stock currently a buy?
Rapid growth
SoFi had another strong showing last year, and investors are certainly paying attention to its impressive growth trajectory. Adjusted revenue increased 26% in 2024, and it added 2.8 million net new members, bringing its total to more than 10.1 million. Its membership count has expanded by tenfold in just the past five years.
This rapid growth is only possible when a company is doing something right for its customers. Offering financial services and lending products in an all-digital format is beneficial because it focuses management’s attention on delivering a superior user experience. Handling your finances is incredibly easy within the SoFi ecosystem. That’s not always true with other banks.
SoFi also has meaningful growth potential. Its average customer uses about 1.5 SoFi products, which gives it plenty of opportunities to cross-sell them on other services and get those existing customers more engaged. SoFi says that currently, it has 6.3 times more financial services products being used than it has lending products, a ratio that’s up dramatically from 3.8 in 2021. Perhaps when the macroeconomic environment becomes easier and interest rates decline, SoFi will see a surge in lending activity.
CEO Anthony Noto has huge ambitions. As he noted in the company’s Q3 conference call: “[Y]ou will often hear me say it’s a matter of when, not if, we become a top 10 financial institution.”
As of Dec. 31, SoFi had $36 billion in total assets on its balance sheet — not even enough to crack the top 50 by this measure. If SoFi gets even remotely close to Noto’s goal, it will enjoy substantial upside.
Financially fit
SoFi continues to prove that its business model is working. It has reported five straight quarters of GAAP profitability. In 2024, its net income totaled $499 million. That was a major improvement from its $301 million net loss in 2023.
Of course, investors must consider if the trend can continue. One reason for optimism is that SoFi has competitive advantages. Like other banks, it is probably starting to benefit from switching costs, as customers will be less inclined to go to the trouble of changing to a rival bank once they’ve already established a relationship with SoFi. Speaking more to the cross-sell opportunity, if the company can get its customers to sign up for more products, then those switching costs will get even higher, and its ecosystem will be even stickier.
Another advantage can come from its operating leverage. SoFi doesn’t need to build and operate costly bank branches. Consequently, it can more efficiently leverage its fixed expenses, notably for technology and product development and sales and marketing, as its revenue grows. This could lead to an improving bottom line.
According to Wall Street analysts’ consensus estimates, SoFi’s diluted earnings per share will rise at a compound annual rate of 23.8% over the next three years. That’s a healthy outlook.
Facing a drawdown
SoFi shares have come under pressure recently and are trading 27% off their 2025 high. Nonetheless, the market still appears to be optimistic.
That’s because SoFi’s valuation isn’t a bargain anymore. At its 52-week low in August last year, the stock traded at a price-to-book (P/B) ratio of under 1.2. Today, its P/B multiple is 2.2.
Best-in-class bank JPMorgan Chase trades at a P/B ratio slightly below that of SoFi. On the one hand, SoFi has tremendous growth potential that could justify investors paying that multiple. This is especially true if you have confidence that its earnings will increase at a brisk pace in the years ahead.
On the other hand, there is no margin of safety at today’s level, in my opinion. Investors should wait for a better entry point.
JPMorgan Chase is an advertising partner of Motley Fool Money. Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.
