SoFi (SOFI) stock is down about 23% in the year to date. While the financial technology company continues to perform well, reflected through consistent growth in its member base and products, broader economic uncertainty and concerns about a potential slowdown have weighed on its share price.

Nonetheless, SoFi’s underlying fundamentals remain solid. SoFi has been generating solid revenue growth while expanding its adjusted EBITDA margin. Moreover, the fintech’s bottom line has shown a significant improvement in 2024, with the company reporting its first full year of profitability.

With macroeconomic uncertainty remaining, let’s examine SoFi’s prospects to assess whether now is an opportune time to buy its stock or exercise caution and avoid it.

SoFi Continues to Deliver Solid Growth

SoFi has been delivering solid growth, with its members and products growing at CAGRs of 53% and 55%, respectively, since 2020. This momentum is expected to continue into 2025 and beyond. The financial technology company forecasts its member base to increase by at least 2.8 million in 2025, marking a 28% rise from 2024. This expansion will drive higher product adoption and support its revenue, which is forecast to increase by 23%-26% in 2025.

Looking beyond 2025, SoFi’s management is confident in surpassing its medium-term guidance of 20% to 25% annual revenue growth through 2026. The company also aims to achieve earnings per share (EPS) between $0.55 and $0.80 by 2026, with sustained annual EPS growth of 20% to 25% beyond that.

SoFi’s strategy to diversify its revenue streams will support its future growth. By shifting toward capital-light, fee-based income sources, the company has strengthened its financial position and reduced credit risk. For instance, in 2024, SoFi reported $2.6 billion in adjusted net revenue, representing a 26% year-over-year increase. Notably, its Financial Services and Technology Platform segments generated $1.2 billion in revenue, up 54% from the previous year, and accounted for 47% of total adjusted net revenue, compared to 38% a year prior.

Additionally, fee-based revenue surged 74% to $970 million, driven by higher origination fees, referral income, loan platform growth, and interchange and brokerage services. Further, SoFi’s financial services revenue per product climbed from $59 in Q4 2023 to $81 in Q4 2024, marking a 37% increase, with further improvements expected.

SoFi’s transformation of its loan platform business (LPB) is another crucial factor behind its promising future. In the past, the company either held loans on its balance sheet or sold them to manage risk and capital. Now, SoFi partners with buyers to originate loans, generating fee income while avoiding the burden of holding loans. Additionally, the company retains servicing rights, allowing for continued cross-selling opportunities. This model enables SoFi to scale more efficiently while reducing risk exposure and enhancing profitability.

Another key growth catalyst is SoFi’s expanding deposit base. It secured its bank license in 2022, and since then, its deposits have grown to an impressive $26 billion. The growing deposit base drives its low-cost funding sources, generates interest expense savings, and supports its bottom line. Moreover, SoFi’s balance sheet remains solid, enabling it to capitalize on growth opportunities.

Is SoFi Stock a Buy Right Now?

SoFi is well-positioned for sustained growth, supported by a range of catalysts including its focus on revenue diversification, expanding technology services, evolving loan platform business, and lower funding costs. These factors, combined with the company’s solid footing in the lending space and an untapped addressable market, make SoFi a compelling long-term investment.

In the near term, the company’s continued investments in brand building may impact customer acquisition costs. However, these efforts are expected to drive long-term benefits by increasing brand recognition and product adoption.

Wall Street analysts have a “Hold” consensus rating on SoFi stock. However, given the fintech's solid growth prospects, the recent pullback presents an opportunity to buy SoFi stock at a discounted price.