After a tough couple of years since going public in 2021, SoFi Technologies (SOFI 4.00%) stock has come roaring back. The fintech stock has surged nearly 200% over the past 12 months, fueled by accelerating growth, consistent profitability, and strong adoption across its ecosystem of digital banking products.
As SoFi stock climbs over $20 per share, many investors are asking whether now is the right time to buy. Here's what you need to know.
SoFi's blowout quarter
SoFi kicked off 2025 with strong momentum as it set new records in net revenue and member growth. Specifically, SoFi reported net revenue of $772 million, up 20% year over year, fueled by 800,000 new members during the quarter, and surpassed 10.9 million total users, a 34% year-over-year increase.
As for its bottom line, SoFi delivered its sixth consecutive profitable quarter, generating $71 million in net income, and ended the quarter with $1.2 billion in net cash. Notably, the company's net income fell 19% year over year as it shifted away from lending toward higher-margin financial services and technology.
Fee-based revenue from services like interchange fees, referrals, and brokerage climbed 67% to a record $315 million. That showcases how well-rounded SoFi's efforts to boost sales have been.
In a press release, CEO Anthony Noto highlighted the company's recent momentum, stating: "We delivered our highest revenue growth rate in five quarters, driven by new records in members, products, and fee-based revenue. These results demonstrate the strength of SoFi's unique strategy and product architecture, which give us a sustainable competitive advantage with the highest lifetime value per member."
Image source: Getty Images.
Crypto comeback and 2025 outlook
SoFi is also getting back into the cryptocurrency space in a big way. After stepping back from crypto offerings due to regulatory uncertainty, the company is preparing to return to the market with broader crypto and blockchain services.
Noto told investors: "Given the evolving regulatory landscape, we see an opportunity to reenter the crypto and blockchain business more comprehensively. ... Our aspirations over time are as broad and deep as they are for our existing SoFi business, including developing crypto and blockchain offerings across borrowing, investing, paying, saving, and our technology platform services for third parties."
Crypto will be just one part of SoFi's broader investment push. The company is expanding its platform with more tools for stock and exchange-traded fund (ETF) trading, including highly sought-after private companies like Epic Games, OpenAI, and SpaceX. Noto stressed the importance of this diversification, saying: "We are stepping on the gas to launch new products faster and iterate to improve our existing products at an even more rapid pace. The opportunity in front of us is too massive to risk underinvesting to capture it."
NASDAQ: SOFI
Key Data Points
As for how the expansion may translate to its 2025 outlook, management projects adjusted net revenue in the range of $3.235 billion to $3.31 billion. Notably, this range is an increase from management's previous guidance of $3.2 billion to $3.275 billion. And if its new projections were to come to fruition, its 2025 adjusted net revenue would equate to year-over-year growth of approximately 24% to 27%.
Meanwhile, management raised its 2025 net income guidance to a range of $320 million to $330 million. While that would mark a slight decline from the $332 million earned in 2024, management's revised outlook reflects an improvement from its earlier forecast of $285 million to $305 million.
Here's what could go wrong for SoFi
Despite SoFi's impressive growth and its expanding suite of financial products, there are a few red flags investors should consider. The stock currently trades at a price-to-earnings ratio of 49, a steep multiple that reflects high expectations for future performance. While such valuations are not unusual for high-growth fintechs, they leave little room for error and raise the bar for consistent execution. As previously mentioned, earnings are expected to remain relatively flat in the near term, which makes it harder to justify the premium valuation unless the company can reignite profit growth.
SOFI PE Ratio data by YCharts
Moreover, SoFi's share count has risen by roughly 20% over the past three years, effectively diluting existing shareholders. This means that each share now represents a smaller ownership stake in the company. While some of the increase was tied to strategic acquisitions and stock-based compensation to attract and retain top talent during its early growth phase, continued dilution can be a serious concern. To reverse or offset this trend, management may eventually need to repurchase shares, which can be far more expensive than issuing them in the first place, especially if the stock price continues to rise.
SOFI Shares Outstanding data by YCharts.
Is SoFi stock a buy?
There's a lot to like about SoFi as a long-term investment. Its revenue continues to exceed expectations, which may be enough to attract growth investors. However, for traditional value-oriented buyers, the stock still looks expensive, especially given its ongoing business model pivot, which puts it in direct competition with newer players like Crypto.com and Robinhood Markets, as well as established firms such as Charles Schwab and Fidelity.
That said, SoFi is worth keeping on your watch list to see if earnings begin to catch up and management can rein in the rising share count. If both trends move in the right direction, it could present a more compelling entry point. Until then, there's nothing wrong with sitting on the sidelines.
