Key Points
Just eight months ago, SoFi (NASDAQ: SOFI) was trading for nearly $33 per share. Today, it trades for about half of that price, despite posting 41% revenue growth, record loan originations, rapidly growing profitability, and excellent progress in cross-selling products to its existing membership base.
So, why is there such a disconnect between SoFi’s stock performance and the growth of its business? To be fair, the stock is down for a reason — actually, several of them, which I’ll discuss in a bit. But I’m making a bold prediction that SoFi will return to its previous highs, more than doubling from its current level, within one year.
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How SoFi got here
Before we go further, it’s important to understand what triggered the 50% decline from the highs. And there isn’t just one reason. Just to name a few:
- SoFi’s lending business benefits from lower interest rates and a strong consumer environment. With inflation rising to a 3-year high, interest rates have not only remained stubbornly elevated, but there’s a firm possibility that the Federal Reserve will raise interest rates.
- SoFi’s first-quarter results handily beat expectations, but management kept guidance steady, suggesting a deceleration later in the year.
- SoFi raised $1.5 billion by selling shares earlier this year (at around $27 per share) with no clear reason. The bank was already well capitalized. Moves like this are (correctly) perceived as being dilutive to shareholders.
There are a few other negative catalysts, including being passed over for S&P 500 inclusion and a short-seller report from Muddy Waters Research.
Reasons SoFi could double
As mentioned earlier, SoFi’s recent results have been excellent. In the first quarter of 2026, SoFi reported 41% year-over-year revenue growth, 35% growth in its membership base to 14.7 million, an all-time high of $12.2 billion in loan origination volume, and net income more than doubling year-over-year.
Not only that, but management anticipates earnings per share growing at an annualized rate of about 40% through at least 2028.
One specific number to watch is SoFi’s cross-buy rate, which has steadily risen from 36% a year ago to 43% in the first quarter. This is the percentage of SoFi’s products that are opened by existing customers, which is significant for two reasons. For one thing, a high cross-buy rate means that its customers are deepening their relationship with SoFi. Second, it’s far more economical to sell products to existing customers, where acquisition costs are nearly zero. Currently, the average SoFi customer has about 1.5 products with the bank, in contrast to 4-6 products for the typical “mega bank” customer, so there’s lots of room to improve here.
Other potential catalysts include SoFi’s recently launched stablecoin (the first from a chartered bank), the new SoFi Plus premium membership, and the fee-generating loan platform business, just to name a few.
There are also some catalysts that are outside SoFi’s control, such as the direction of interest rates or general consumer sentiment. If the Iran war ends sooner rather than later and energy prices, in particular, cool off, it could provide a nice tailwind for the financial sector.
The bottom line
Of course, I know that it’s a bold prediction to say that SoFi stock will double within a year. And if certain factors outside SoFi’s control, such as the interest rate environment, don’t cooperate, it could keep the stock at a low valuation.
Having said that, SoFi has all the makings of a misunderstood stock with more upside potential than many think. The risk-reward dynamics look extremely attractive right now, and not only is SoFi already one of my larger positions in my portfolio, but I plan to add to it at these levels.
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Matt Frankel, CFP® has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
