The market is finally recognizing that SoFi Technologies (SOFI 4.52%) has what it takes to become a viable long-term bank, and that its services are attracting a young and vibrant cohort of members who will drive growth for a long time.
SoFi stock is up 233% over the past year, crushing the market. Let’s check out where SoFi might be in five years.
SoFi’s revenue growth has been outstanding over the past few years. It accelerated to 44% year-over-year growth (for adjusted net revenue) in the 2025 second quarter. Management attributes this to its “one-stop shop” approach to online banking, where customers can get everything they need to easily manage their finances all on SoFi’s app.
The growth is coming from many different places, which is one of the reasons SoFi has so much momentum today. You can’t credit it just to new customers or new products or anything else — the whole business is performing well. It’s attracting new members at a fantastic rate, with a record 850,000 new ones in the second quarter, a 34% increase over last year. But it’s also getting more fee-based revenue, more cross-selling into more products, deeper engagement, and with lower interest rates, more loan originations.
This network effect is bringing the business to a whole new level. Generally, the larger a company becomes, the slower it grows. But as the positive cycle means an expanding business overall, in five years from now, growth could still be double digit.
One of the reasons SoFi stock plunged after its hyped-up initial public offering was that it looked like your typical risky, unprofitable tech stock. It’s made great strides from those time to scale without loading up on expenses, and its fee-based revenue is padding the top line. Much of that comes from the company’s financial services segment, which is absolutely exploding, with revenue up 106% year over year. Financial services contribution profit was up 241% from last year, padding the bottom line.
With the loan segment back to strong growth as well, and the low cost of running an all-online bank, total earnings per share (EPS) increased from $0.01 to $0.08 year over year, a 700% increase. Look for SoFi to remain comfortably profitable over the next five years, although since it’s a bank, this will ebb and flow along with interest rate movements and other economic factors.
Much of the enthusiasm around SoFi is coming from its expansion of its platform. Not only is it offering all the regular, important elements of a financial services firm, like bank accounts, loans, and credit cards, it’s offering targeted solutions to help its young, tech-savvy clientele, like crypto-based products and more high-level financial instruments in investing. SoFi just announced that it’s launching Options Level 1 strategies for certain clients, and that’s on the heels of announcing cryptocurrency trading and Blockchain-based international money transfers.
Management said that it’s offering the options trading based on consumer feedback for what they’re most looking for. Expect SoFi to keep rolling out new and expanded services that its customers really want, and for that to roll into its cycle of more customers, higher revenue, and increased earnings.
The lending segment is still its core segment, although non-lending revenue accounted for 55% of the total in the second quarter. As it gains more customers, originates more loans, and has more data, its credit metrics are improving.
As an example from this quarter, its annualized charge-off rate decreased from 3.31% in the first quarter to 2.83% for personal loans, and the 90-day delinquency rate declined for the fifth straight quarter to 0.42%. Over the next five years, it should be able to handle interest rate and economic changes more stably in its loan segment.
SoFi stock has had a wild run-up over the past three years — 430%. But it’s not cheap; it trades at a forward, 1-year P/E ratio of 50 and a price-to-book ratio of 4.5. That premium may be justified, but as SoFi become bigger and more reliable, it valuation is likely to come down.
I expect SoFi stock to keep growing and rewarding shareholders over the next five years and longer, and likely beating the market. But it’s also likely to be more volatile than the S&P 500, and it’s also not likely to repeat its recent massive gains.
