From Loans to Crypto: Why SoFi Might Be Fintech’s Next Big Winner

SoFi is up 20% this month…

And Wall Street still calls it a Hold.

Net income has increased by 459% year over year. EPS? Up 700%.
They’re adding nearly a million users per quarter.

And yet most people have no clue what’s fueling this beast.

And with SoFi… there’s one thing almost everyone is overlooking:
This company’s building a digital walled garden just like Apple—and it’s working.

But there’s a problem. The valuation’s sky high. The crypto comeback’s still a maybe. And interest rates? Not helping.

So what’s the truth behind SoFi? Is this a fintech rocket ship… or a hype trap waiting to implode?

Let’s get into it.

SoFi’s Overview

SoFi Technologies is a one-stop shop for digital financial services that helps folks manage their finances within three main segments.

Its first segment is Lending, which covers personal loans, student loans, home loans, and other related services. Then the second is their Technology Platform, which provides a complete transaction system including credit application and approval. Its third segment is Financial Services, which includes products like SoFi Money and SoFi Invest.

So you can say that Sofi supports the full transaction lifecycle, allowing its members to make financial decisions like borrowing, saving, spending, investing – all in one place.

Now let’s talk about the stock.

Now, SoFi stock is up 20% over the past month.

However, a consensus among Wall Street analysts is a Hold, highlighting that mixed signals have tempered enthusiasm, despite the strong growth story. 

Financials

SoFi has just released its second-quarter financials with Net Revenue coming in at $854 million, which was up 43% from the same quarter last year.

Net income also skyrocketed 459% to  $97  million compared to the same period last year, and that translates to a diluted EPS of 8 cents a share, up from 700% in just one year. 

So, how did this happen? Well, it’s its product and member growth are both up 34%. This is what you want to see in a growing company like Sofi.  

Sofi added 850,000 new members last quarter alone, thanks to SoFi’s rapid expansion and effective cross-selling within its ecosystem. And this approach is quite similar to Apple’s ‘Walled Garden’ strategy. I believe these growth figures show how well SoFi is capitalising on its digital-first model.

Growth Catalysts

At its current trajectory, SoFi investors are potentially looking at a massive boost.

First, SoFi is expected to grow as it expands its access to.

SoFi’s investment opportunities include private equity, venture capital, private credit, and real estate, which enables its members to build a diversified portfolio. Now, through partnerships with Cashmere, Fundrise, and Liberty Street Advisors, the company is expanding into private markets. This move opens up alternative investments to a new generation of investors.

Next, the second catalyst is SoFi’s comeback to cryptocurrency and blockchain technology.

SoFi paused its cryptocurrency services in 2023 as part of its compliance with federal regulations tied to its national bank charter. They weren’t getting out of crypto, but rather it was a regulatory necessity, as nationally chartered banks faced tight restrictions on crypto-related activities at the time. 

SoFi is re-entering the crypto space with the Office of the Comptroller of the Currency’s (OCC) new guidance that allows banks to offer crypto custody, stablecoin services, and other digital asset capabilities under specific conditions. This positions itself at the crossroads of fintech and crypto. 

Sofi isn’t quite there yet, but… I think this is the perfect time for SoFi to make its comeback by offering cryptocurrency. The market is showing bullish momentum, with rising market cap and user growth. On top of that, the U.S. government is taking a more constructive stance on crypto through the GENIUS law, along with the STABLE and CLARITY Acts currently moving through Congress. If all goes according to plan, SoFi is well-positioned to capture the broader shift toward digital finance.

The third reason that can propel SoFi is its multi-billion-dollar agreements with Blue Owl to help fund SoFi’s loans.

SoFi Technologies has secured its largest Loan Platform Business agreement through a $5 billion investment from Blue Owl Capital, a leading asset manager with over $250 billion in total assets under management.  This lets SoFi grow its lending business without taking on the credit risk, and it brings in steady, fee-based income. I think it’s a smart, capital-light way to scale, which is good for SoFi’s long-term growth strategy.

This is something we talk about often in my Discord channel… Let me give you a quick example. Think about the bank you use every day—chances are, it’s the same one you’ve been a customer for years, maybe even since college. Why? Habit and trust. SoFi knows that once someone opens a checking account, takes a loan, or invests on their platform, they’re likely to stick around. That’s the digital loyalty loop SoFi’s building—and it’s powerful.

Risks & Red Flags

Now, for all the excitement about SoFi, the road to success isn’t straight up. 

First, its cryptocurrency comeback may be late.

One thing about cryptocurrency is that it’s extremely volatile. Its gains are attractive and unmatched, but it’s not always the case. SoFi recognises this and stated on their website that: “Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, retirement funds or traditional investments.”

Next, let’s talk about interest rates.

When rates rise, borrowing gets more expensive, which can slow demand for loans, which is a big part of SoFi’s business. It also raises the risk of loan defaults, as borrowers may struggle with higher payments, leading to potential losses. Plus, higher rates often shift investors toward bonds, which can weigh on SoFi’s stock.

Valuation Breakdown

Now, comparing SoFi Technologies’ forward price-to-earnings to its peers, SoFi still isn’t one of the bigger players like Ally or Synchrony.  But that could be a good thing for you. SOFI trades at almost 68 times forward earnings, while its peers sit between 6.80 and 10.70. Even the broader financial sector trades much lower.

For new investors, forward P/E shows how much the market is willing to pay today for a dollar of expected earnings in the next 12 months. Trailing p/e is the reverse – it’s how it tells us the multiple of the last 12 months. Regardless of whether it’s trailing or forward, PE gives us a glimpse of how much growth is already priced in.

With that in mind, a comparison of SoFi to traditional banks doesn’t give the full picture because it is still a young, fast-growing company, and higher valuations tend to come with the territory. 

Who Should Buy SoFi Stock?

If you are a growth-oriented investor who’s looking for a fintech play, then SoFi could be a great addition to your investment. But I’d call this risk capital. That means if you’re into buying stocks, perhaps this would occupy 1-2% of a portfolio, and that’s because the company still has lots to prove.