SoFi Technologies Inc.’s (NASDAQ: SOFI) chief executive officer stated at a conference last year that the fintech company is targeting 30% member growth and 20% revenue growth. Its stock is trading 3.4% lower than a week ago. A proposed 10% credit interest cap could boost fintech companies, but Sofi faces some profit-taking pressure due to its premium valuation compared to peers. The share price is still up 26.2% from six months ago, far outperforming the S&P 500 and Nasdaq. SoFi’s one-year gain is 70.5%.
Worries about recession had an impact on fintech stocks like SoFi last year. Some analysts see it as having a steep premium, while others anticipate decades of growth potential. The overall sentiment could be described as cautious optimism. SEC filings revealed that some asset management firms increased their stakes in SoFi in the second half of the year.
SoFi has been exploring re-entry into the crypto and blockchain space. It became the first nationally chartered bank to offer cryptocurrency trading, and it announced the launch of a new, actively managed exchange-traded fund (ETF) focused on artificial intelligence. SoFi also announced a partnership with Lightspark to leverage blockchain technology for international money transfers.
SoFi made its public debut on June 1, 2021, through a merger with a special purpose acquisition company (SPAC), Social Capital Hedosophia Holding Corp. V. Before the merger, the company’s original name was Social Finance. It started as a student loan financing firm before expanding into loans, mortgages, and other financial products. After the SPAC acquisition, SoFi was equipped with substantial capital to enhance its technology stack to better scale its 2020 acquisition of Galileo. The Galileo platform was developed to deploy a wide range of financial services quickly, giving SoFi the tools to bring numerous financial products to a mass market.
SoFi went public at $10 per share, and the price quickly jumped 150%, but the stock’s performance was lackluster afterward. However, investors only care about what happens from this point on, particularly over the next one, three, and five years. Let’s crunch the numbers and share our best estimate for SoFi’s future share price. No one has a crystal ball, and even the Wall Street “experts” are often wrong more than they are right in predicting future stock prices. But we provide our revenue and earnings projections as part of our peer-to-peer valuation.
SoFi’s Recent Performance
The table below summarizes performance in share price, revenue, and profits (net income) since its IPO.
*Revenue and net income in millions
In the past four years, SoFi has more than doubled its revenue, but that top-line growth also came with a jump in total operating costs, particularly the $720 million in sales and marketing expenses in 2023. However, the increases in operating costs are money well spent with in-house technology improvements and member-generating marketing spending.
SoFi has hit an inflection point in profitability and has done a stellar job of expanding revenue and improving earnings per share (EPS).
As SoFi’s revenue grows, it becomes more profitable, meaning its costs per customer decrease. This scalability is important because it indicates that as the company grows, it will become even more profitable. Given that the industry is growing and SoFi is outperforming its peers, there is strong optimism that SoFi’s earnings per share will continue to rise.
Key Drivers of SoFi’s Stock Performance
Expansion Financial Services: SoFi’s ambition to become a one-stop shop for financial services will likely drive future growth. The company plans to continue expanding its product lineup — including new lending products, investment options, and insurance services — to cater to a broader range of financial needs.
Bank Charter and Deposit Base Expansion: Obtaining a national banking charter allows SoFi to use its growing deposit base to fund lending operations more efficiently. This access to lower-cost funds is expected to drive net interest income growth, enhancing profitability as SoFi scales its banking operations.
Cross-Selling and Customer Retention: SoFi’s strategy of cross-selling its wide array of financial products aims to increase the average number of products per customer. With this integrated approach, it aims to improve customer retention and lifetime value, thereby boosting overall revenue and profitability.
SoFi’s Share Price Estimates 2026-2030
The Wall Street consensus one-year price target for SoFi Technologies is $27.11, which is 2.5% higher than the current share price. Note that of 22 analysts covering the stock, only six recommend buying shares.
24/7 Wall St. is more bullish on the stock, with a $35.70 target price by year’s end 2026. That target represents about a 35% gain over the current share price.
24/7 Wall St. compared other fintech/lenders when deciding on our price-to-sales valuation of 3.5 times for the entire time frame of our analysis. Included in the analysis were Block Inc. (NYSE: XYZ), PayPal Holdings Inc. (NASDAQ: PYPL), Upstart Holdings Inc. (NASDAQ: UPST), LendingClub Corp. (NYSE: LC), and Affirm Holdings Inc. (NASDAQ: AFRM), which gives us a blended valuation of around 3.3x sales.
By the end of the decade, we estimate SoFi’s stock price will be $55.30 per share with 10% year-over-year revenue growth. Our estimated price would more than double the current share price.
