SoFi Technologies (SOFI) has surged more than 200% over the past year, silencing skeptics and leaving even its biggest supporters questioning whether the stock has become overheated. Following yesterday’s headline-grabbing Q3 earnings report, shares dipped slightly—perhaps a sign that SoFi was already priced for perfection. Moreover, market participants have learned from Q4 2024, when the firm surprised the market with superb numbers.
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The fintech pioneer delivered explosive growth, with strong momentum across several metrics, including members, products, and fee-based revenues that continue to compound. For that reason, even after this year’s meteoric rise, I remain Bullish—believing SoFi still has room to run as Wall Street fully absorbs the strength of its latest results.
What Drove Q3’s Explosive Growth
Put simply, SoFi’s Q3 was a standout quarter, with net revenue jumping 38% to a record $950 million—a clear sign that, thanks to its capital-light, durable model, the company may have just reached escape velocity.
Even more impressively, fee-based revenue soared 50% to a record $409 million, now accounting for about 43% of total revenue. Growth in members and products also remained strong, as SoFi added a record 905,000 new members (bringing the total to 12.6 million) and 1.4 million new products (reaching 18.6 million), with cross-buy rates rising to around 40%. To me, this reinforces that SoFi’s one-stop-shop strategy is resonating—not just with new users, but increasingly with its existing customer base as well.
In the meantime, lending activity was the spark plug. Total originations hit a record $9.9 billion (+57% YoY): personal loans reached an all-time high of $7.5 billion, student loans rose 58% to $1.5 billion, and home lending touched ~$945 million (including a record $352 million in home equity). And on top of balance-sheet lending, the Loan Platform Business (LPB) originated $3.4 billion on behalf of third parties, generating $167.9 million of revenue, up 2.75x YoY and now running at a >$13 billion annualized pace.
Payments and investing didn’t disappoint either. Interchange fee revenue jumped 55% YoY, powered by nearly $20 billion in annualized spend across SoFi Money and the credit card. Deposits also climbed $3.4 billion QoQ to $32.9 billion, boosting low-cost funding and keeping members inside the ecosystem where cross-sell happens.
SoFi’s Explosive Scale Unlocks Powerful Margin Expansion
As SoFi continues to scale, its P&L is clearly benefiting from powerful economies of scale—a hallmark of a maturing digital bank. Following its explosive top-line growth, adjusted EBITDA climbed 49% to a record $277 million, representing a 29% margin, while adjusted EPS came in at $0.11.
Impressively, this marked SoFi’s eighth consecutive GAAP-profitable quarter, with net income reaching $139 million. This widening gap between revenue growth and profit growth perfectly illustrates the strength of SoFi’s integrated platform model, where more products per member and more transactions per product drive increasingly efficient operating leverage.
I expect profit margins to keep expanding in the coming quarters as SoFi’s funding mix shift continues to lower structural costs. In Q3, the company’s average deposit rates were 190 basis points below warehouse facilities, translating to roughly $627 million in annualized interest expense savings—a powerful tailwind as deposits scale.
Additionally, the growing share of fee-based revenue streams such as lending platform business (LPB), interchange, and brokerage is further boosting profitability. This was evident in Financial Services, where the contribution margin surged to 54%, up 12 points year-over-year, highlighting the scalability and efficiency embedded in SoFi’s business model.
SoFi’s Lofty Valuation is Not a Ceiling
There’s no denying that SoFi’s numbers are impressive—the honest debate now is whether the stock has gotten ahead of itself. I don’t believe it has. Management once again raised guidance, now projecting roughly $3.54 billion in adjusted net revenue and about $1 billion in adjusted EBITDA for 2025, with adjusted EPS around $0.37.
Yes, that means SoFi currently trades at a lofty 80x forward EPS multiple, but this isn’t your typical bank story. The company’s fee-based revenue mix is climbing toward 43% of adjusted revenue, it’s executing a Rule-of-40-style playbook—combining high growth with expanding margins—and it’s nurturing a sticky, scaling member base that’s steadily compounding lifetime values through cross-sell.
If SoFi can maintain anything close to Q3’s 38% revenue growth while growing profits even faster, valuation multiples could compress quickly, leaving plenty of upside from current levels.
Is SoFi Technologies Stock a Buy, Sell, or Hold?
Wall Street’s sentiment on SoFi is mixed, which makes sense given the overextended rally that has raised sustainability concerns. The stock is now carrying a Hold consensus rating based on five Buy, eight Hold, and four Sell ratings over the past three months. Notably, SOFI’s average stock price target of $23.27 implies ~25% downside from current levels, reflecting market skepticism after its significant recent gains.
SoFi’s Flywheel Gains Momentum
SoFi’s Q3 delivered everything a bull could hope for—accelerating member and product growth, a more diversified fee mix, and clear signs of operating leverage kicking in as the platform scales. The company isn’t just growing—it’s maturing, with each quarter showing how SoFi’s ecosystem of lending, deposits, and financial services is feeding on itself to drive stronger engagement and higher profitability.
With guidance raised once again and the benefits of SoFi’s one-stop financial platform becoming increasingly evident, I believe the path of least resistance for the stock remains upward. As the company continues to compound growth across multiple revenue streams while expanding margins, any short-term pullbacks could offer compelling entry points for investors looking to build or add to a long-term position.