Where Will SoFi Be in 1 Year?

It's an understatement to say there's a lot of pessimism in the stock market right now. Tariffs have been imposed, rescinded, and modified, making it very difficult for investors and businesses to map out long-term strategies.

Investors keeping an eye on the financial sector may be looking at SoFi Technologies (NASDAQ: SOFI) and wondering where the online bank might be a year from now amid the turmoil. So, let's look at what's happening with SoFi right now and how the company might be affected by the current economy.

Image source: Getty Images.

What's going well for SoFi right now

The fintech has quickly become a one-stop shop for many people's financial needs. During the past five years, its members have soared ninefold to more than 10 million, and its services include checking and savings accounts, student loans, and mortgages.

SoFi's financial growth is impressive, too. Revenue jumped 26% last year to $2.6 billion, and its adjusted earnings per share rose to $0.15, up from a loss of $0.10 in 2023.

Management issued a strong outlook for 2025 as well, with revenue expected to reach about $3.2 billion at the midpoint of its estimates, rising 25% from 2024.

Chief Executive Officer Anthony Noto said at the end of last year, "Even with how great 2024 was, the future has never been brighter for SoFi than it is in 2025." He said financial conditions were the strongest since he joined the company, with lower interest rates, strong employment, and active capital markets.

The problem is that the favorable financial environment that fueled its recent growth may be weakening.

The immediate future looks cloudy

Although SoFi is growing fast, there's some reason for potential investors to be a little skeptical that it will continue at the same pace in 2025. The next year could be bumpy for the company and many others because of President Donald Trump's tariffs.

While the details change on a near-daily basis, the implementation of significant import tariffs -- at least 10% on most nations -- is causing many consumers and businesses to rethink their current financial outlook.

A recent CNBC survey found that 60% of U.S. CEOs expect a recession to start in the next six months, and dozens of economists in a separate survey said the chances for one are up to 47% this year.

It's not great for anyone if a recession -- or even an economic slowdown -- shows up. But it can be especially bad for banks. SoFi depends on people signing up for new financial products, borrowing money, and taking out loans, and members being able to repay those loans. An extended period of economic pain could cause consumers to hit the brakes on spending and put a strain on their ability to make payments.

There's still a lot of uncertainty about the economy over the next few months, but it's safe to say that what most people assumed was the positive trajectory at the end of 2024 has turned into a general sense of pessimism. People have already changed their tune as well, with a recent University of Michigan survey finding that consumer sentiment is now below what it was even during the Great Recession.

All of this uncertainty means that it's unlikely SoFi will have another banner year in 2025. The effects of tariffs have yet to be seen, but if they cause an economic slowdown, consumers will most likely curb their spending, which could hurt the business.

That doesn't mean current shareholders should panic-sell. The long-term prospects are still there. But I wouldn't be eager to start a new position with SoFi until investors get a clearer picture of what's happening with the economy.

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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.