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SoFi Technologies (SOFI) stock has soared more than 181% over the past year. The fintech company’s rally is backed by its strong operating performances over the past several quarters. SoFi has consistently expanded its member base and product offerings, reflecting an ability to attract and retain customers while diversifying its business mix. Moreover, SoFi’s shift toward capital-light revenue streams, a move that enhances profitability and reduces dependence on interest income, adds to investors’ optimism. At the same time, its lending business continues to perform strongly, supported by a robust deposit base that helps the company keep funding costs low. Together, these factors have translated into strong growth in its share price. However, such a rally in SoFi stock raises concerns around valuation. Moreover, SoFi trades above analysts’ average price target of $25.87, suggesting the market is already pricing in a fair amount of future growth. So, will valuation concerns stall the rally in SoFi stock? SoFi Stock Still Has Room to Run While SoFi’s valuation is a concern, its operating metrics indicate that the company remains in growth mode. The revenue growth rate has accelerated, driven by new member additions and increased product adoption. This momentum in its business is likely to carry forward, particularly as SoFi deepens engagement with existing users and scales its capital-light, higher-margin businesses. This means that SoFi might still have room to run. In the most recent quarter, the company added a record 905,000 new members, bringing its total membership to 12.6 million, a 35% increase year-over-year. Product growth was equally strong, with 1.4 million new products added, representing a 36% year-over-year increase to a total of 18.6 million. Importantly, SoFi’s ability to deepen relationships with existing members has strengthened. Roughly 40% of new products were opened by existing users, the highest cross-buy rate since 2022, and this rate has increased for four consecutive quarters. This combination of expanding membership and deeper engagement has translated into top-line growth. SoFi’s adjusted net revenue climbed 38% year-over-year to a record $950 million in the third quarter. The company’s Financial Services and Technology Platform segments together brought in $534 million, up 57% from a year earlier. Notably, these higher-margin segments exceeded half a billion dollars in quarterly revenue. This shift in mix toward fee-based and technology-driven income will drive SoFi’s long-term profitability. Fee-based revenue reached a record $409 million in the quarter, rising 50% year-over-year. The gains were driven by origination and referral fees, brokerage activities, and interchange income. On an annualized basis, SoFi’s capital-light fee-based revenue now tops $1.6 billion. SoFi has also managed to grow its low-cost funding base. Its total deposits were $32.9 billion, led by growth in member deposits. This provides a durable, low-cost funding base, supporting its bottom line. While its capital-light business is growing, SoFi’s Lending segment remains a steady contributor, with adjusted net revenue climbing 23% year-over-year to $481 million. Loan originations reached a record $9.9 billion in the quarter, up 57%, with personal loan originations hitting $7.5 billion. Notably, $3.4 billion of that total came from the loan platform business, reflecting SoFi’s expanding reach and operational flexibility. While SoFi’s fundamentals remain strong, its technical indicators show further upside potential. SOFI’s 14-day Relative Strength Index (RSI) stands at 59.1, comfortably below the overbought level of 70, suggesting that momentum remains sustainable. Moreover, the stock’s price is trading above both short- and long-term moving averages, an indicator that typically signals ongoing strength and potential for continued trend support. Is SoFi Stock a Buy Now? SoFi is well-positioned to deliver solid growth, driven by rapid member expansion, rising fee-based revenue, and improving profitability. The company’s growing product offerings have created multiple revenue streams that continue to gain traction. This broader mix positions SoFi well to sustain long-term growth, even as the broader economic environment fluctuates. Furthermore, potential tailwinds from future interest rate cuts could provide additional support. That said, the stock’s recent rally suggests that much of this optimism may already be reflected in its current valuation. Investors could wait for a better entry point if the stock experiences a pullback. The long-term fundamentals remain appealing, but its risk–reward remains well balanced in the short term after such a strong run. Currently, analysts maintain a “Hold” consensus rating on SoFi stock.
