SoFi Stock Surges Again: Time to Buy After Another Blowout Quarter?

SoFi just smashed expectations—again. The fintech disruptor’s latest earnings report sent shares soaring, leaving Wall Street scrambling to adjust price targets. But is the hype justified, or is this another case of ‘buy the rumor, sell the news’ in a market that loves a good story?

The Bull Case: Momentum Meets Metrics

Revenue growth? Check. User acquisition? Accelerating. Profitability? Finally trending in the right direction. SoFi’s banking charter continues to pay dividends—literally—as it steals market share from legacy banks still stuck in the 20th century.

The Risks: Regulation Looms

Student loan moratoriums giveth, and Congress taketh away. With crypto trading now in the mix, SoFi’s playing with regulatory fire—just ask any exchange that’s tangled with the SEC lately. One compliance misstep could erase those gains faster than a meme stock crash.

The Verdict: High Risk, Higher Reward

This isn’t your grandfather’s savings account. SoFi stock trades like a tech play because it is one—volatility included. For investors who believe fintech will eat traditional finance? Worth a position. For the faint of heart? Maybe stick with that 0.01% APY from your ‘too big to fail’ bank.

Image source: Getty Images.

Another quarter of rapid growth

It's supposed to get harder for businesses to grow at a rapid pace once they become large. SoFi Technologies has slowed down a little, but it's still expanding its reach at a pace that makes other all-digital banks seem like they're moving in slow motion.

Ifis still America's largest all-digital bank by customers, it won't be in the top spot much longer. SoFi's lead competitor in the space boasts over 11 million customers on its customer-facing website. According to its latest earnings report, 3.4 million are primary deposit customers.

SoFi began 2025 with over 10 million members, and by the end of June it boasted 11.7 million. The number of financial products it manages for its customer base at the end of June ROSE by 34% year over year to 17.1 million.

At nearly $30 billion, SoFi's deposit base is roughly one-fifth the size of Ally Financial's. This is a good time to remind folks that Ally began as the financial arm ofand has roots that run over a century deep. SoFi Money, the service that collects deposits in checking and savings accounts, launched in 2019.

Second-quarter net revenue soared by 44% year over year, which gave management confidence to raise its outlook. Revenue is expected to reach $3.375 billion this year, which is $65 million more than the high side of the range provided in April.

Earnings that outgrew expectations are expected to continue rising. Management now expects GAAP earnings to reach $0.31 per share in 2025, up 11% from the high end of the guided range it provided in April.

Reasons to remain cautious about SoFi stock

The most immediate reason to exercise caution is an extremely rich valuation. After shooting higher in response to second-quarter results, the stock has been trading at about 80 times this year's earnings estimate.

High earnings multiples aren't unusual for SoFi, but that's because it's been growing by leaps and bounds. If its pace of growth slows, or investors begin anticipating a slowdown, the stock could fall hard.

SoFi expects to add at least 3 million new members this year. This is an outstanding accomplishment for a company that signed up its 1 millionth member just five years ago. Adding 3 million new members in a year is remarkable, but reaching this goal WOULD lead to a total increase slightly below 30% in 2025. That would be the slowest annual rate of member growth SoFi recorded since its inception.

SoFi's marketing has been outstanding, but there are only around 347 million adults in the U.S. Expecting more than 1% of them to switch banks to SoFi each year does not seem reasonable.

In addition to slower growth ahead, investors need to remember this bank hasn't been tested in a long recession yet. Over the five-year period that ended in March, SoFi originated $54 billion worth of unsecured personal loans. Most of that has been repaid, but there's still $22 billion in unpaid balances. SoFi's personal loan losses over this period are an acceptable 4% of the original balance, but unsecured loans are the first ones consumers neglect when things get tough.

Time to buy?

I'm not about to let go of my SoFi shares despite the big run-up. That said, I'm not in a hurry to buy more right now either.

This bank's valuation is appropriate if we assume recent growth rates can continue in the decade ahead. Population limitations, though, mean it's just a matter of time before things begin slowing down. It's probably best to keep this stock in a watch list until it falls to a more reasonable valuation.