SoFi (NASDAQ: SOFI) has experienced a significant decline, with its stock falling 37% since January, despite achieving its first full profitable year and strong business momentum. Recent volatility and economic uncertainty raise concerns about profit margins and the potential impact of tariffs, which could affect borrowing demand. However, SoFi’s member base grew to 10.1 million in 2024, with revenue increasing by 26%. The company has raised securitization agreements worth $1.2 billion and expanded its loan platform. Despite recent losses, SoFi’s growth potential remains strong, making its current valuation potentially attractive.
The financial industry has experienced significant challenges during the recent stock market decline, but the banking technology firm SoFi (NASDAQ: SOFI) has taken a bigger hit than many of its competitors.
As of now, SoFi’s stock price has decreased by 37% since its peak in January, even with a recent uptick, despite the company reporting its first full year of profitability and substantial growth across its operations. However, it’s important to realize that the stock market has been extremely volatile in the days surrounding this writing, so the price fluctuation could be considerably more or less by the time you see this.
That said, SoFi’s earnings report raised some worries regarding profit margins, and external factors such as the ongoing trade war could negatively impact the business. For instance, although tariff policies are still evolving, if these tariffs lead to inflation and the Federal Reserve maintains high-interest rates, SoFi’s cost of deposits may remain elevated. Furthermore, in the event of economic downturns driven by tariffs, consumer demand for loans might drop sharply, potentially leading to increased delinquencies, both of which would adversely affect SoFi’s operations.
Nevertheless, SoFi displays considerable momentum and possesses several growth drivers that could sustain its earnings trajectory for years ahead.
The most recent data available from SoFi pertains to the fourth quarter of 2024, indicating that the company entered this year with impressive momentum. The firm’s membership rose to 10.1 million, a 34% increase from the close of 2023, while revenue surged by 26% in 2024.
Profitability is also on the rise. 2024 marked SoFi’s first complete year of positive net income, with adjusted EBITDA increasing by 26%, in line with earnings growth. On the flip side, SoFi’s 2025 guidance was a bit lackluster, with higher revenue expectations but lower EPS projections, signaling that margins may not be as robust as anticipated. Still, SoFi has a track record of exceeding its own guidance, so I will remain vigilant on this as we progress through the year.
Although the economic landscape has generally been discouraging, and uncertainty looms over the stock market and the broader U.S. economy, SoFi’s news has largely been very positive.
In 2025 alone, SoFi has announced two personal loan securitization deals amounting to approximately $1.2 billion, along with a $5 billion partnership to enhance its loan platform with Blue Owl Capital. Additionally, the Galileo technology platform has made several significant announcements, such as the recent introduction of its Deposit Sweep product, designed to help customers optimize their interest income.