SoFi (SOFI 4.40%) and Affirm (AFRM 7.56%) are both high-growth fintech companies. SoFi, which initially provided student loans, now offers mortgages, auto loans, personal loans, credit cards, insurance policies, estate planning services, stock trading tools, and banking services across its digitally native platform. Affirm provides "buy now, pay later" services, which enable consumers to split their purchases into smaller installment plans without a credit card.
Both of these companies aim to disrupt traditional financial institutions, but which one is a better buy right now? Let's compare their growth rates, valuations, and long-term catalysts to make an informed decision.
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SoFi still has plenty of room to grow
SoFi targets younger, digitally native users who prefer not to visit brick-and-mortar banks. It acquired the digital payment processing company Galileo in 2020, and it obtained a U.S. bank charter in 2022 to launch its own digital-only direct bank. Today, it promotes itself as a monolithic "one-stop digital shop" for all of those traditional banking and brokerage services.
SoFi's digital-native strategy enabled it to expand at a significantly faster rate than brick-and-mortar banks, and it utilized its own AI algorithms to analyze data from its members and refine its services accordingly. It's also using AI tools to automate and accelerate its services.
NASDAQ: SOFI
Key Data Points
SoFi's total number of members quadrupled from 2.5 million in 2021 to 10.1 million in 2024, and rose to 12.6 million by the third quarter of 2025. Its total products in use surged from 1.9 million in 2021 to 14.7 million in 2024, and increased to 18.6 million in the third quarter of 2025. Galileo, which operates separately from SoFi's platform, hosts nearly 160 million accounts.
SoFi continued to gain new users even as it weathered the temporary suspension of student loan payments from 2020 to 2023 and rising interest rates in 2022 and 2023.
From 2024 to 2027, analysts expect its revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at a CAGR of 27% and 44%, respectively. That growth should be driven by the expansion of its loan platform business (LPB), which originates for third parties, increased deposits in its digital bank as it gains more members, its rollout of new blockchain and crypto features, and its SoFi Plus subscription service.
Affirm's business is firing on all cylinders again
Affirm's buy now, pay later (BNPL) platform approves "microloans" for younger and lower-income consumers who may struggle to get approved for traditional credit cards. It doesn't charge any compound interest or hidden fees on those payments. Affirm's merchant fees are also usually lower than the 1.5%-3.5% "swipe fees" charged by the top card processing networks.
From fiscal 2021 to fiscal 2025 (which ended this June), Affirm's number of active consumers more than tripled from 7.1 million to 23.0 million, its number of active merchants surged from 29,000 to 376,800, and its gross merchandise volume (GMV) more than quadrupled from $8.3 billion to $36.7 billion. It achieved that growth even as inflation curbed consumer spending, and it locked in big merchants like Amazon and Walmart to offset its earlier losses from the troubled connected fitness company Peloton.
NASDAQ: AFRM
Key Data Points
Affirm's BNPL business is well-insulated from macroeconomic headwinds because lower-income consumers become increasingly dependent on its services as their spending power wanes. In the first quarter of fiscal 2026, its number of active consumers increased to 24.1 million, while its number of active merchants rose to 419,000. Its 30+ day delinquencies (excluding Peloton and its Pay in X loans) remained below 3%, so it isn't sacrificing its financial stability to gain more customers.
From fiscal 2025 to fiscal 2028, analysts expect Affirm's revenue to grow at a CAGR of 25%. Its adjusted EBITDA, which turned positive in fiscal 2025, could increase at a CAGR of 131% through 2028. The growing usage of its Affirm Card, embedded partnerships with other fintech and e-commerce platforms, and its overseas push into Europe should fuel that expansion.
Which growth stock is the better buy?
With an enterprise value of $32.5 billion, SoFi trades at 31 times this year's adjusted EBITDA. Affirm, with an enterprise value of $27.2 billion, trades at 24 times this year's adjusted EBITDA.
SoFi and Affirm are both great growth stocks for long-term investors. However, I believe Affirm's narrower focus, superior growth rates, stronger resistance to macro headwinds, and lower valuations all make it a more attractive investment than SoFi right now.
