Fintech giant SoFi’s (SOFI) fortunes have whipsawed in 2024. It was in the red in the first half of the year but has since recovered… and then some. The stock has more than doubled over the last three months and gained an impressive 47% in November riding the “Trump trade.”

SoFi stock is up more than 65% YTD based on yesterday’s closing prices and is outperforming the S&P 500 Index ($SPX) by a wide margin. The stock delivered impressive returns in 2023 also, and more than doubled amid the tech rally. Investors might be wondering whether the stock will continue its run in 2025, or whether the law of averages will catch up with SOFI. 

SoFi Continues to Grow at a Fast Pace

SoFi is growing at a fast pace and its adjusted net revenues rose an impressive 30% year-over-year in the third quarter. The growth has been quite secular and the company’s topline has grown by over 20% for 17 consecutive quarters. Importantly, the company achieved this as interest rates went from near zero to a multi-year high. It also successfully navigated the pandemic and a banking crisis in 2023.

The moratorium on student loan repayments was yet another headwind for SoFi as its student loan refinancing business, which was once its key revenue driver, essentially came to a halt during that period. To its credit, SoFi has grown spectacularly despite not having much macroeconomic support. The business looks to be on firm footing for 2025.

SoFi’s 2025 Outlook Looks Bright

CEO Anthony Noto perhaps best summed up the company’s outlook during the Q3 earnings call. “We're heading into 2025 with the most favorable conditions of the last seven years with declining rates and a stable economy with the most diverse business we've ever had with more members in our ecosystem and more products that serve their needs than ever before,” said Noto.

The company reiterated that delinquencies peaked in March and have since been improving sequentially. SoFi’s non-lending business continues to do well and is more than making up for a slowdown in its lending arm. 

And the “Trump trade” will give SoFi’s student loan business a boost, as President-elect Donald Trump is unlikely to support student loan forgiveness measures. This should help SoFi scale its loan platform and improve its bottom line.

SoFi Stock 2025 Forecast

Despite this, sell-side analysts have consensus rating of “hold” on SOFI stock. Of the 17 analysts actively covering SoFi, only 4 rate it as a “strong buy” or "moderate buy” while 10 rate it as a “hold.” The remaining 3 analysts rate the stock as a “Strong Sell.”

SoFi’s mean target price of $10.47 is 34% below current price levels which implies that on average, analysts see shares falling over the next 12 months. Its Street-high target price of $19 is however around 20% higher than current prices.

Is SoFi Stock Overvalued?

While SoFi has proved its mettle and is a fast-growing company posting sustainable profits, its valuations have been a sour point for many. It had a tangible book value of $4.4 billion at the end of September while its current market cap is north of $17 billion. A price-to-tangible-book value of nearly 4x might appear too stretched for a financial company. 

SoFi’s valuation based on near-term earnings looks lofty too as it trades at a forward price-to-earnings (P/E) multiple of 120x which would appear elevated even to many growth investors – let alone to those seeking value.

However, investors need to take these multiples in context. Firstly, I believe that the price-to-book multiple is much less relevant for SoFi as lending revenues now account for just about half of its total adjusted revenues. Moreover, their contribution is expected to taper down further in the coming quarters as the company pivots to an asset-light model.

As for the P/E multiple, SoFi has been profitable for only four quarters and the current profits are quite subdued. SoFi issued a 2026 earnings per share guidance of $0.55 to $0.80. Assuming the mid-point of the guidance, the stock trades at 23.5x its 2026 projected earnings. SoFi expects its GAAP EPS to rise between 20%-25% after 2026 as well, so the multiples will start to seem more reasonable.

While I remain a long-term SoFi bull, these prices don’t look enticing enough to trigger a fresh purchase, as the risk-reward profile is not favorable enough.