Bank of America Doubles Down on SOFI Skepticism—Fintech’s Rally Can’t Shake Old-School Bears

Wall Street’s legacy players still don’t get it. While SOFI’s financial services arm flexes growth muscle, Bank of America clings to its bearish rating like a boomer clutching paper checks. Guess someone forgot to short Blockbuster too.

Here’s the kicker: fintech adoption metrics scream bullish, but institutional analysts keep benchmarking disruptors against dinosaur balance sheets. Newsflash—digital-first banking doesn’t need branch networks when it’s got viral user acquisition.

One cynical truth? Big banks downgrade anything that threatens their 3% APY checking accounts. Meanwhile, SOFI’s crypto integrations and algorithmic lending stack quietly eat their lunch.

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SOFI’s Lofty Valuation Overshadows Solid Financial Services Business

Bank of America analyst Mihir Bhatia highlighted SoFi Technologies’ rapidly growing Financial Services business, which includes products like SOFI Money, SOFI Invest, and credit cards. The top-rated analyst highlighted that during the Q4 2024 earnings call, SOFI raised the outlook from a 50% compound annual growth rate (CAGR) over 2023-2026 to 65% due to upbeat product growth and monetization. Bhatia expects this business’ importance to continue to increase over the next few quarters.

The analyst also noted that the company leverages the Financial Services’ consumer base to cross-sell its other products, including those of the Lending segment. He also pointed out the success story of SoFi’s Loan platform, with the company able to originate loans in a “capital-light manner” and deliver significant income. Overall, Bhatia stated that SoFi has strong capabilities (like advisor and funds) and is now driving monetization and asset growth, which should boost revenue and contribution profit in 2025 and beyond.

Despite these positives, Bhatia reaffirmed a Sell rating on SOFI stock witha a price target of $13, as he contends that “valuation is full.” Specifically, SOFI stock is trading at 20x mid-point of 2026 EPS guidance (or 24x Bank of America’s estimate/26x the Street’s estimate), which indicates a significant premium compared to other consumer finance companies and banks. He concluded that at the current multiple, SOFI stock has “gotten ahead of fundamentals.”

Is SOFI a Good Stock to Buy?

Given macro pressures and valuation concerns, Wall Street has a Hold consensus rating on SoFi Technologies stock based on six Buys, five Holds, and three Sell recommendations. The average SOFI stock price target of $14.05 indicates that SOFI stock is fully valued at current levels.