In yesterday's trading, 75 stocks hit new 52-week highs on the NYSE, while 78 did so on the Nasdaq. One of the stocks hitting a new 52-week high was SoFi Technologies (SOFI), the fast-growing California fintech stock.
SOFI Stock has now gained $217% over the past 12 months, hitting 42 New 52-week highs in the process. It closed Tuesday trading five cents from $20, a long way from its 52-week low of $6.01 in August 2024.
I’ve been bullish about SoFi’s business model and CEO Anthony Noto for a long time, so I’m not surprised to see it trading near $20. However, I’m confident the skeptics feel it ought to be back in single digits, while the dreamers probably feel it’s worth $40.
The truth will play out over the next 12-24 months.
The U.S. markets have gotten pricey. VettaFi’s Advisor Perspectives article, published on July 1 by contributor Jennifer Nash, suggests that they are overvalued by 137% based on four valuation metrics tracked by VettaFi.
Nash is careful to remind readers that these indicators are used to form an opinion on long-term investment returns. They don’t suggest the markets will drop off a cliff anytime soon.
As for SoFi’s stock, it trades at 155 times its normalized earnings per share over the next 12 months, according to S&P Global Market Intelligence, the highest multiple since it became profitable mid-way through 2024.
Is SOFI a $20, $40, or $10 stock? All consider all three.
SOFI Stock Is Fairly Valued
SoFi is a fast-growing business that continues to grow into its premium valuation.
Analysts expect it to earn $0.91 in 2029, which brings the forward EPS multiple down to 22x, a reasonable price to pay for a company whose earnings are projected to grow by 43% compounded annually over the next five years.
Heck, you could make the argument it’s undervalued based on this rate of growth, but I’ll leave that for the next section.
Yesterday’s new 52-week high of $20.89 was also its all-time high since going public on June 1, 2021, through its merger with Social Capital Hedosophia Holdings Corp. V, a special purpose acquisition company (SPAC) created by Social Capital founder Chamath Palihapitiya.
It’s not unreasonable to suggest the stock is due for a breather. That doesn’t mean it will happen. The Barchart Technical Opinion screams strong near-term buy.
However, the fact that only eight out of 21 analysts rate it a Buy (3.29 out of 5), with a target price of $14.30, which is well below its current trading price, suggests that investors contemplating a purchase tread carefully. Especially given the volatile economic environment we’re in.
It Is a $40 Stock
SoFi continues to grow by expanding the number of products and services it offers to its 10.9 million members. Doing so will ensure that it continues to grow its membership.
It hit a record number of members at the end of Q1 2025. In Q1 2022, it had 3.9 million members, with a compound annual growth rate (CAGR) of nearly 41%. The combination of membership growth and additional products is likely to result in higher revenues and earnings in the quarters and years to come.
On July 8, the company announced that its members would gain access to the private capital markets through asset management firms such as Cashmere, Fundrise, and Liberty Street Advisors.
Cashmere invests in early and growth-stage companies. Think SoFi before it went public. Fundrise got its start in real estate, but has since expanded into venture capital, offering these investments through its direct-to-investor platform. Lastly, Liberty Street finds top-notch alternative asset managers to do the investing for investors.
“With investment minimums starting at $10, SoFi is leveling the financial playing field. SoFi offers a wide range of institutional-grade investment opportunities to over 10.9 million members,” stated SoFi’s July 8 press release.
As Barchart contributor Wajeeh recently stated, the fintech wants to be more than just a digital bank. There’s no reason why SoFi can’t expand its traditional role beyond banker and personal lender to more high-net-worth advisory services that tend to be the domain of the big banks and registered investment advisors.
In late January 2024, when it was trading around $7.70, I predicted that it could reach $20 by Christmas. It didn’t quite make it, topping out at $17.19 a week before the holiday. Now that it’s here, I expect it to go to $40 by Christmas 2026.
The Price Was Right at $10
The skeptics will say that SOFI stock traded under $10 for 31 months from March 2022 through October 2024. Not much has changed about the business in that time.
It still generates very little from a large amount of lending. In Q1 2025, the unpaid principal balance of its personal, student, and home loans was $26.22 billion. As a result, it generated $413.4 million in net revenue in the first quarter and a contribution profit of $238.9 million, representing 0.91% of sales.
It must continue to grow its loan portfolio without too many non-performing loans eating into its slim profits. While it’s unlikely for the U.S. economy to fall apart in the near term, the tariff situation is likely to increase the number of bad loans it has in its portfolio.
A sharp uptick in bad loans would likely lead to losses rather than profits. In the 12 months ended March 31, SoFi’s operating profit was $219.5 million, a healthy margin of 7.8%.
However, if its provision for loan losses — $31 million in the latest 12 months — were to increase tenfold, to $300 million, or 1.1% of its loan portfolio, the operating profit would disappear overnight, and with it its share price.
The Bottom Line
I continue to like SoFi as a long-term bet. That said, I do think it’s fairly valued at the moment.
Options would be an ideal way to gain exposure to SOFI stock. Its 30-day average options volume is healthy at 470,610, providing investors with many different options strategies to bet on the fast-growing fintech.
In the long term, I do think it’s a $40 stock.
