SoFi Technologies (SOFI 4.26%) stock gained 70% in 2025 and nearly 400% during the past three years. However, it's been flat for the past few months. Are investors waiting for the next update? And is now the right time to buy?
Why SoFi is soaring
SoFi is a bank, but unlike the traditional big and regional banks, it's all online. It's geared toward a younger generation of consumers who are just getting started in personal financial management, and in addition to being completely digital, it's targeting its marketing and innovation toward this digital-savvy cadre of customers.
Image source: Getty Images.
For example, it sponsors music and sporting events geared toward this crowd, and it's rolling out a large assortment of blockchain-based services like cryptocurrency trading and a SoFi stablecoin.
This approach resonates with the target consumer base, as well as with anyone looking for easy-to-use online services. As a result, SoFi has been growing by leaps and bounds.
Here's a snapshot of the third-quarter results:
- Adjusted net revenue increased 38% year over year.
- Adjusted earnings per share increased from $0.05 to $0.11.
- It added a record 905,000 customers, a 35% increase over last year.
- It added 1.4 million new products, a 36% increase over last year.
All the parts are working together
There are several ways that SoFi stands out from the large pack of neobanks that are seeking to disrupt traditional financial services. Management often touts its one-stop shop model that aims to offer everything a user needs all in one place.
SoFi has bank accounts, credit cards, investing tools, and more, and everything is available on its app. Its new global remittance product is a great example of how it's using this approach to stand out; it can be complicated on many bank apps to send money internationally, and SoFi is using the blockchain to make it easy and low-cost.
Management sees its growth trajectory through this all-in-one lens. Since its target customer is fairly young, it envisions offering them something to get started, like a bank account.
Indeed, 90% of new SoFi Money deposits come from direct deposits, which implies a stable and upwardly mobile consumer base. They might need a bank account to deposit salary checks, and then they might add a credit card. As they move up on the corporate ladder and have greater financial management needs, they might start using the investing tools and buy insurance packages, in addition to deepening engagement in their existing accounts. As their salaries increase, they might pay higher fees for some products, and they might join the SoFi Plus membership program. And so on.
Today, SoFi is growing quickly, in part due to high demand from record numbers of new customers. But even if that eventually slows down, there's a long growth runway in monetizing its user base.
NASDAQ: SOFI
Key Data Points
Three growing segments
SoFi's core business is lending, but it has expanded into a large assortment of financial services as well as a business-to-business tech platform called Galileo.
The loan business is thriving, with a record $9.9 billion in originations in the third quarter, representing a 57% year-over-year increase. Lower interest rates are boosting loan applications and making it easier for borrowers to pay them back on time, leading to higher approval rates and lower default rates. Management also attributes the robust performance to its own innovations, including step-up repayments for student loans.
However, the financial services segment is growing even faster. Revenue from this segment increased 76% over last year, while contribution profit increased 126% to $226 million. That's getting very close to the lending contribution profit of $260 million, and as SoFi's varied profit sources make it stronger.
SoFi stock looks compelling
SoFi is set to report 2025 fourth-quarter earnings on Jan. 30, and the stock is likely to move in line with results. SoFi stock has become fairly expensive recently, trading at a price-to-earnings (P/E) ratio of 48 and a price-to-book ratio of 3.6. Some premium is justified for the long-term opportunity and outstanding performance. But investors may want to use a dollar-cost-averaging strategy to buy today, but benefit from more attractive entry points that may come up.
