SoFi Technologies (SOFI): A Bull Case Theory

We came across a bullish thesis on SoFi Technologies on Archive Invest's Substack by Felix. As of 29ᵗʰ June, SoFi Technologies's share was trading at $16.77. SOFI's trailing and forward P/E were 39.95 and 59.24 respectively according to Yahoo Finance.

SoFi Technologies (SOFI) has demonstrated significant growth and improvement in its fundamentals, transforming from a niche student loan refinancer to a comprehensive financial platform. The company's total revenues grew from $565.5 million to $2.64 billion in four years, representing a 367% total growth with a 47% CAGR. SoFi achieved a dramatic turnaround in net income, delivering $498.7 million in net income for 2024, one of fintech's most impressive turnarounds. The company's EBITDA also turned positive, reaching $234 million in 2024, with an operating margin of 8.9%.

SoFi's growth story is proven, and the key question for investors now is whether the company can maintain this momentum while building sustainable profitability in an increasingly competitive fintech landscape. The company's digital banking and lending segments are driving growth, with total lending origination volume increasing strongly to $23.22 billion in 2024. SoFi's financial services segment emerged as a major growth engine, nearly doubling with 88% growth to $821.5 million. The company's gross profit margin grew steadily from 68.4% to 82.5%, reflecting improved operational efficiency and better cost management.

From a valuation perspective, SoFi's forward P/E ratio is currently near 51.55, close to its median level, suggesting the stock may be approaching fair value. The forward P/FCF ratio is at 25.65x, above its historical median, indicating the stock may be slightly overvalued based on this metric. However, based on the reverse DCF model, SoFi needs to grow its FCF by 42.01% per year to generate a return of 20% per year for investors, which is close to analyst expectations of 43% EPS growth per year. This suggests that SoFi is slightly undervalued at its current price, though not by a wide margin, making it a Hold for now.

Previously we covered a bullish thesis on SoFi Technologies by Value Degen in June 2025, which highlighted user growth, product expansion, and long-term profitability potential. The company’s stock price has appreciated approximately by 25.67% since our coverage. This is because improving profitability boosted investor confidence. The thesis still stands as forward earnings growth remains strong. Archive Invest’s Felix shares a similar view but emphasizes SoFi’s financial turnaround and margin expansion.

SOFI isn't on our list of the 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the risk and potential of SOFI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.