With markets trending lower, this is an excellent time to find some good stocks at lower valuations and entry points.
The financial sector is a particularly good place to look, as the sector has been hit the hardest so far this year, down almost 10% on average. Within financials, fintechs have been hammered, as the KBW Nasdaq Financial Technology Index is off about 11% year to date.
Few fintech stocks have been walloped like SoFi Technologies (SOFI +4.94%) and Upstart (UPST +12.97%). SoFi is down about 33% year to date to about $17.50 per share, while Upstart has fallen about 36% to around $27.75 per share.
Investors may want to kick the tires on these two popular fintechs because they could easily double their value within the next few years.
1. SoFi Technologies
SoFi made news this week when Muddy Waters Research came out with a report saying it was shorting SoFi due to a variety of concerns, calling it a "financial engineering treadmill, not a healthily growing origination business." There were other claims as well, that it mistated unrecorded debt and underreported its charge-off rate.
SoFi officials shot back, putting out a statement saying the report was inaccurate and misleading and demonstrates "a fundamental lack of understanding of our financial statements and business."
NASDAQ: SOFI
Key Data Points
Shares of SoFi were surging the day after, March 18, so investors were taking it in stride. That may have been fueled by notice that SoFi CEO Anthony Noto bought 28,900 shares, or about $500,000 worth of SoFi stock, right after the report was filed, which investors likely saw as a vote of confidence.
When reports like this come out, investors should consume the data, just like anything else, and perhaps keep it in the back of their minds and watch for certain things at earnings time or on earnings calls. But they shouldn't overreact based on allegations in one report -- and that hasn't happened here.
To quickly summarize, SoFi stock has dropped because it was overvalued, not because it had seen growth slow. In fact, growth has accelerated, and the company has consistently been profitable. And its guidance calls for 30% revenue growth and 34% earnings before interest, taxes, depreciation, and amortization (EBITDA) growth in 2026.
It just looks too good to pass up at 29 times forward earnings, down from 44 at the end of 2025. Wall Street analysts are bullish with a median price target of $27 per share, which would be a 53% return. And with similar growth projected in 2027, it is not a stretch to say that SoFi stock could double in the next few years.
2. Upstart
About a month ago, I wrote about some of the struggles that Upstart was facing and why I favored another financial stock, Jefferies (JEF 0.47%). I still like Jefferies, but my view of Upstart has changed dramatically since then for one major reason. Earlier this month, Upstart filed papers with the SEC for a national bank charter, which would allow it to be a full-service bank.
This is an absolute game-changer for Upstart as it would allow the fintech, which used AI technology to process loans, to take deposits and provide its own loans. This would give Upstart a robust new revenue stream, as it currently makes most of its money from fees for providing its AI platform to other banks and financial institutions.
NASDAQ: UPST
Key Data Points
While other banks are ramping up their AI capabilities, Upstart has been training its AI models for more than a decade and has achieved economies of scale that would take competitors time and money to match.
Upstart stock is down about 37% YTD as investors are worried about its high valuation, a change of CEO in May, a decision to stop providing quarterly guidance, and economic concerns that could raise credit risk and lead to a reduction in loans.
The bank charter has not been approved, but the Trump Administration has been approving fintech bank charters at a higher rate than the last administration, with five approved by the Office of the Comptroller of the Currency in December of last year.
The stock may not take off right away, but once rates start dropping and the bank charter comes through, Upstart stock could take off. The stock has a median price target of $45 per share, which would be 62% upside over the next 12 months. That's not quite double, but with the opportunity Upstart has to scale its business with a bank charter, it is certainly a plateau that is in reach within the next few years.
