SoFi Technologies (SOFI 4.10%) had a blowout 2025, closed out with an incredible fourth quarter. It's demonstrating high growth and moving forward, driven by innovation. However, the market didn't see it that way, and the stock tumbled after the report.
There's some macro volatility that's affecting how the market is viewing SoFi right now, and that creates opportunity for investors. Here's why I think it's a great time to take a position.
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A top-10 financial institution
Chief Executive Officer Anthony Noto sees a pathway for SoFi to become one of the top-10 financial institutions in the U.S., and considering its growth rates, that might happen during the next few years. It reported a 37% year-over-year increase in adjusted net revenue in the 2025 fourth quarter, and all of its segments are now contributing double-digit percentage growth and contribution profit.
SoFi's edge is in its one-stop shop approach to financial management, with everything available through one digital app. It also recently launched its Smart Card, connecting the power of the app to a credit card. It's available through a SoFi Plus membership, which comes with many other perks like 1% match on SoFi Invest deposits, access to wealth planners, and a high rate on savings.
Although the company started as a lender, and lending is still its largest segment, it has successfully expanded into a full suite of financial services that lower its risk and enhance its long-term opportunities. It targets the young professional who has a growing and reliable income stream, and 97% of SoFi Money customers are using direct deposit. Its strategy is cross-selling new products over time as this clientele has greater financial needs.
Management is launching all sorts of new, innovative products to attract this customer base to its platform. The market celebrated the return of cryptocurrency trading to the SoFi app, and it has plans to offer many new blockchain-based products. It recently rolled out a SoFi stablecoin, fully reserved dollar to dollar, that will be the basis for many of these launches.
NASDAQ: SOFI
Key Data Points
The right time to buy?
SoFi stock is expensive on a trailing 12-month earnings basis, trading at 56 times earnings. However, that might not be the best valuation method for SoFi stock, or at least not the only one. Since earnings are growing fast, it makes sense to evaluate it from a price-to-earnings growth basis. It trades at 0.6 times expected earnings growth, which suggests that it's undervalued.
Because it's a bank, it should also be evaluated by its price-to-book value, which is 2.6. That's not cheap, but it's not exorbitant. And since SoFi is a tech company as well, that could be a fair value.
If you can buy and hold for the next few years and have some risk tolerance, this could be a good time to buy SoFi stock.
