SoFi's (SOFI +3.33%) stock surged nearly 270% over the past 12 months. The fintech company's robust revenue growth, rising profits, and expanding ecosystem all drew a stampede of bulls back to its stock. Expectations for lower interest rates amplified those gains.
But can this hot growth stock maintain its momentum over the next year? Let's take a fresh look at its business model, growth rates, and valuations to decide.
Image source: Getty Images.
How fast is SoFi growing?
SoFi, which is short for Social Finance, originally focused on providing student loans. Over the past decade, it expanded its business by offering mortgages, auto loans, personal loans, credit cards, insurance policies, estate planning services, and stock trading tools. It strengthened its fintech foundations by buying the payment processing company Galileo in 2020, and it obtained a U.S. bank charter to launch a digital-only direct bank in 2022.
SoFi's digital-only approach enabled it to expand at a much faster rate than traditional brick-and-mortar banks. As a "one-stop shop" for online financial services, it also collects plenty of data for its artificial intelligence (AI) algorithms, which accelerate, refine, and automate many of its services.
NASDAQ: SOFI
Key Data Points
From 2021 to 2024, SoFi's year-end members quadrupled from 2.5 million to 10.1 million, its products in use surged from 1.9 million to 14.7 million, and its adjusted annual revenue grew at a CAGR of 37% from $1.01 billion to $2.61 billion. It continued expanding over the past year as it gained more members and launched more products.
|
Metric |
Q2 2024 |
Q3 2024 |
Q4 2024 |
Q1 2025 |
Q2 2025 |
|---|---|---|---|---|---|
|
Members |
8.8 million |
9.4 million |
10.1 million |
10.9 million |
11.7 million |
|
Growth (YOY) |
41% |
35% |
34% |
34% |
34% |
|
Products in use |
12.8 million |
13.7 million |
14.7 million |
15.9 million |
17.1 million |
|
Growth (YOY) |
36% |
31% |
32% |
35% |
34% |
Data source: SoFi Technologies. YOY = Year-over-year.
A lot of that growth was driven by younger Millennial and Gen Z users, who prefer accessing digital banks via apps instead of visiting traditional banks. Its diverse mix of services (including its free Relay financial planning app) is also drawing in a wide range of customers. For the full year, it expects to grow its member base by about 30%.
Moreover, two of SoFi's biggest headwinds have dissipated. The federal freeze on student loans, which throttled its growth for three and a half years, ended in September 2023. Interest rates, which surged in 2022 and 2023 and curbed the market's demand for new loans, fell sharply in 2024.
How profitable is SoFi?
In the first half of 2025, SoFi's year-over-year growth in revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) accelerated. It's also stayed profitable on a generally accepted accounting principles (GAAP) basis for seven consecutive quarters.
|
Metric |
Q2 2024 |
Q3 2024 |
Q4 2024 |
Q1 2025 |
Q2 2025 |
|---|---|---|---|---|---|
|
Adjusted revenue growth (YOY) |
22% |
30% |
24% |
33% |
44% |
|
Adjusted EBITDA growth (YOY) |
80% |
90% |
9% |
46% |
81% |
Data source: SoFi Technologies. YOY = Year-over-year.
For the full year, it expects its adjusted revenue to rise about 30%, its adjusted EBITDA to grow 44%, and for its adjusted EBITDA margin to expand 3 percentage points to 28%. Its profits are rising as it gains more members, originates more loans, and generates more revenue from its higher-margin fee-based services.
Where will SoFi's stock be in a year?
Analysts expect SoFi's adjusted revenue to rise 31% in 2025 and 23% in 2026. They expect its adjusted EBITDA to increase 48% in 2025 and 43% in 2026. That makes it one of the market's fastest-growing fintech stocks, and it looks reasonably valued at 9 times this year's sales and 32 times its adjusted EBITDA.
PayPal, which is growing slower, trades at 10 times this year's adjusted EBITDA. Upstart, which is growing faster, trades at 34 times this year's adjusted EBITDA. Assuming SoFi matches analysts' expectations and trades at about 30 times the current year's adjusted EBITDA, its stock could rise another 35% over the next 12 months. It might remain volatile and sensitive to any interest rate headlines, but its future still looks bright.
