SoFi (SOFI 5.08%) recently reported third-quarter earnings, and the stock reached a new all-time high. Even before earnings, SoFi has been a fantastic investment, with shares up by 340% over the last year and a half.
Despite the strong performance, however, I think the best could be yet to come. Here's a rundown of the business momentum that has led SoFi's stock to its current level and where I think it will go from here.
Image source: SoFi Technologies.
Incredible momentum
SoFi continues to surpass analysts' expectations (and their own) quarter after quarter, and it doesn't look like this will end anytime soon.
In Q3, SoFi reported 38% adjusted net revenue growth, as well as its highest earnings per share ever. Beyond the headline numbers, SoFi added 905,000 members during Q3, originated $9.9 billion in loans, and grew its deposit base by 11%, all of which are all-time records for SoFi. What's more, not only was growth impressive, but the growth rates in both members and products represent an acceleration over 2024.
NASDAQ: SOFI
Key Data Points
At the same time, asset quality improved, as shown by a 23 basis-point decline in personal loan net charge-offs. And tangible book value has more than doubled over the past two years.
The company had an active quarter when it comes to innovation, launching "level one" options trading and an agentic AI exchange-traded fund (ETF) in its investment platform. And it's prepared to launch SoFi Pay (blockchain-based global remittance) and more upcoming products.
Massive potential to grow
It's tough to overstate SoFi's growth potential. Even after more than tripling its revenue over the past five years, the most exciting chapters in SoFi's growth story could be still to come. Just to name a few things to keep in mind:
- SoFi's loan platform business (LPB), which originates loans on behalf of partners and provides referrals, is exploding, with volume nearly quadrupling from Q2 to Q3. This is a source of low-risk fee income that could get much larger.
- SoFi is best known for personal loans, but its home loan business is growing fast. Origination volume grew 93% year over year in Q3, and if mortgage rates fall, it could be a big catalyst.
- The Trump administration's plan to privatize parts of the federal student loan portfolio could be a major opportunity for SoFi as one of the few companies with the technical capabilities to service private student loans on a wide scale.
- Cryptocurrency trading is set to return to SoFi by the end of the year, and this could be a major driver of new customers into its ecosystem.
- SoFi's business isn't as widely known as you might think, with unaided brand awareness at just 9.1% of Americans. As the company expands its reach, its membership base could get several times larger.
It's also worth noting that SoFi aims to be an all-in-one financial app, and there are still plenty of standard banking products and services that the company doesn't offer (yet). For example, I still must maintain an account at my old brokerage because SoFi doesn't yet support custodial accounts for minors. The key takeaway is that there is a lot of room to grow the ecosystem, as well as massive growth potential within many of its existing businesses.
My (bold) price prediction
SoFi is not a "cheap" stock, at least in comparison to other banks. But other banks aren't growing nearly as rapidly, nor do they have the same opportunities to disrupt and expand. SoFi's stated goal is to become a top-10 U.S. financial institution, and if management can continue to execute on its growth strategies, the company could get there sooner than you might think.
In fact, I'll boldly predict that if SoFi continues to beat its own lofty expectations as it has done consistently for the past several years, this could be a $100 stock within the next five years.
