Desk setup looking at stocks by LanaStock via iStock SoFi stock (SOFI) has gained over 90% in the last three months. It has rebounded sharply from its 2025 lows, not only turning positive for the year but also achieving YTD gains of 38%, outperforming the S&P 500 Index ($SPX) by a significant margin. In this article, we’ll discuss whether SoFi is still a buy or if it would be prudent to take some profits off the table here.
The last time I covered SoFi in June, it was trading around $15. The stock now trades above $20, a price level it hasn’t been able to rise to since 2021 when it went public by merging with one of Chamath Palihapitiya’s special purpose acquisition companies (SPACs).
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www.barchart.com SoFi Is a SPAC Success Story
All other companies that Palihapitiya took public with his SPACs trade well below the IPO price of $10. SoFi is a rare exception not just for Palihapitiya-backed SPACs, but also the wider SPAC ecosystem. Many former SPACs have either gone bankrupt or slipped into oblivion.
Many of the companies that opted for SPAC mergers were disruptive businesses seeking to redefine their respective industries. However, most either had flawed business models or burned too much cash for them to be sustainable.
This is where SoFi stands out. The company has challenged the status quo in the banking landscape with its innovative products and diversified business. SoFi has turned profitable on a GAAP basis while continuing to grow its top line at a stellar pace. It has an ambitious target of becoming among the top 10 financial institutions in the U.S. – a goal that does not look entirely unachievable, even if lofty.
Why Has SoFi Stock Rallied?
SoFi’s recent rally has been backed by a both supportive macroenvironment as well as positive company-specific news. Geopolitical tensions have eased while markets have started taking President Donald Trump’s tariff announcements in stride.
On a company-specific level, SoFi’s re-entry into crypto trading was received positively by the market. The foray comes at a time when there is an increased appetite for digital assets. Earlier this month, SoFi said that it would add more private market funds to its platform, which would let members invest in popular privately held companies like Elon Musk’s SpaceX and ChatGPT-parent OpenAI. Cross-selling incidentally is a key opportunity for SoFi, whose member count was 10.9 million at the end of March, with the number rising over 10x in the preceding five years.
Story continuesSoFi Stock Forecast
Despite its stellar financial performance and the accompanying rally, SoFi has failed to win over the analyst community. Earlier this week, Citizens JMP downgraded SoFi stock from an “Outperform” to “Market Perform” over valuation concerns. Goldman Sachs also assumed coverage of the stock with a “Neutral” rating and $19 target price.
Their ratings match the consensus “Hold” rating that SoFi has had for the last many quarters. While SoFi has generally traded above its mean target price for the last year, after the recent rally, it has run up to its Street-high target price of $21.
www.barchart.com Should You Buy SoFi Stock?
SoFi trades at a forward price-earnings (P/E) multiple of 77.2x with a price-to-book value of 3.5x. The stock appears quite overvalued on these multiples when compared with traditional banks. However, SoFi is not a traditional bank. I see the company as having the body of a traditional bank with the soul of a fintech. Having the banking charter helps SoFi gain access to low-cost member deposits and lowers its reliance on high-cost wholesale borrowing.
At the same time, it has the agility of a fintech, which enables it to launch some products that traditional banks might not. SoFi gets a high (and rising) share of its revenue from non-lending-based ventures, which warrants higher multiples, particularly on book value.
SoFi previously guided for an earnings per share (EPS) of between $0.55 and $0.80 in 2026, which I believe could be revised upwards if its crypto business takes off in a big way. Going by the top end of the guidance, SoFi trades at 26.2x its 2026 EPS, which still does not look exorbitantly high as SoFi expects its EPS to rise by between 20%-25% beyond 2026 as well.
I have been a long-term SoFi bull and have used sharp rallies to book profits while buying more shares when the stock dips. After the recent rally in SoFi, I am a bit wary of the stock, as at least the short-term risk-reward does not look too favorable. I would rather use the opportunity to take some profits off the table here, and will add more shares to my position if the stock falls from these levels.
On the date of publication, Mohit Oberoi had a position in: SOFI. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
