Shares of SoFi Technologies (SOFI 2.62%) are on fire right now. As of May 14, they have surged 47% higher just in the past five or so weeks. This mimics the bullish fever that has taken over the investment community since early April, supported by easing trade tensions and solid financial updates from important businesses.
The momentum can definitely create an exciting environment for shareholders. But is this fintech stock a millionaire maker? Here's what investors need to know about SoFi.
Image source: SoFi.
SoFi continues to register impressive growth
Through its digital app, SoFi offers a range of financial services and lending products. This includes checking and savings accounts, a credit card, investment accounts, and student, personal, and home loans. What's more, SoFi also has a platform that other financial services entities can use to offer banking products to their own customers.
Regardless of what offering we're zeroing in on, technology is at the core of everything SoFi does. At the end of the day, it's all about providing customers with an exceptional user experience.
Along the same vein, it's probably not much of a surprise that the business has registered such phenomenal growth. Total net revenue increased 172% between 2021 and 2024. And it was up 20% in Q1 2025 on a year-over-year basis. This is despite ongoing economic uncertainty.
It helps that the customer base keeps expanding at an unbelievable clip. SoFi currently has 10.9 million members, which is what it calls its customers. That figure is up more than tenfold from the end of 2019. Clearly, the company is doing something right that has allowed it to find such incredible product-market fit.
According to Wall Street consensus analyst estimates, SoFi's revenue is projected to increase at a compound annual rate of 19.8% between 2024 and 2027. It's reasonable to expect this clip, as well as the pace of new customer additions, to eventually slow as the business becomes more mature. However, there is still a long way for SoFi to go to make further inroads in the financial services industry.
Profits are trending in the right direction
In 2023, SoFi reported a net loss of $301 million. This continued a streak of operating in the red for the company. This was OK, given that management was fully focused on driving growth at all costs.
In 2024, the business turned the financial corner. SoFi reported net income of $499 million last year, translating to a solid net profit margin of 18.7%. The leadership team expects the bottom line to expand at a brisk pace in the years ahead. Wall Street seems to agree, with earnings per share (EPS) projected to grow 87% between 2024 and 2027.
Investors are wise to always take forecasts with a grain of salt. Of course, the world is inherently unpredictable. In this instance, factors like competition, macro forces, or management decision-making can all get in the way. But based on the company's track record thus far, investors might want to give SoFi the benefit of the doubt. It's important to pay close attention to bottom-line performance in the years ahead.
Trading well off its record high
SoFi still has a long way to go before reaching its previous high-water mark. As of this writing, shares are 46% below their peak. Momentum is brewing, though.
Investors can buy the stock today at a forward P/E ratio of 50.3. This obviously doesn't look like a bargain opportunity at first glance. However, if you believe that EPS will rise meaningfully, then the current valuation looks that much more attractive.
Because SoFi is a smaller enterprise that is attacking a massive industry, I believe it has the potential to make investors millionaires one day. Just know that there is a lot of uncertainty, even though the upside is there. It's also important to understand that banking on a single stock for your financial well-being is usually not a smart move.
