Shares of SoFi Technologies, Inc. SOFI have skyrocketed 163% over the past six months, vastly outperforming the industry’s 26% gain. Over the past year, the stock has surged 179%, reflecting a wave of investor optimism.
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After such a sharp rally, the key question now is whether SoFi still has room to climb, or if a pullback may be looming. Here’s a closer look at what’s driving the momentum and the outlook ahead.
Strong Membership Growth Fuels Momentum
SoFi continues to deliver exceptional user growth, adding a record 850,000 new members in the second quarter of 2025. Total membership has now reached 11.7 million, marking a 34% year-over-year increase. This expanding user base isn’t just growing in numbers but also in engagement. SoFi added 1.3 million new products during the same period, up 34% year over year.
35% of new products were adopted by existing members, highlighting the company’s strong cross-selling capabilities and product diversification. This trend reinforces customer loyalty, enhances lifetime value, and lowers churn risk. In essence, SoFi’s ability to deepen customer relationships while continuously expanding its ecosystem positions it as a long-term winner in the fintech space.
Expanding Fee-Based Revenue Strengthens the Business Model
SoFi is rapidly shifting toward a capital-light, fee-based model, a transition that investors view positively for its sustainability and scalability. In the second quarter of 2025, fee-based revenue jumped 72% year over year to reach $378 million, driven by origination fees, referral commissions, interchange income and brokerage fees.
Annualized fee-based revenue now exceeds $1.5 billion, significantly reducing the company’s dependence on interest income. This evolution not only strengthens SoFi’s margin profile but also mitigates exposure to interest rate volatility and credit risks.
SoFi’s profitability metrics are improving as well; its adjusted EBITDA margin hit 29%, up 600 basis points year over year, while the incremental EBITDA margin of 43% underscores disciplined cost control and operational efficiency. Altogether, these developments affirm SoFi’s transformation into a highly scalable and profitable fintech leader.
Earnings Outlook Remains Robust
Analysts remain optimistic about SoFi’s earnings trajectory. The Zacks Consensus Estimate projects third-quarter 2025 EPS of 8 cents, representing a 60% increase from the prior year. Earnings are expected to grow over 100% in 2025, followed by strong double-digit gains in 2026.
Revenue forecasts are equally upbeat, with top-line growth of 28.5% projected for the third quarter and 32% growth for full-year 2025, followed by 23.5% in 2026. These figures highlight SoFi’s accelerating operating momentum and growing confidence in its long-term business fundamentals.
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Competition is High
SoFi may benefit from a first-mover advantage in the U.S. fintech space, but it faces formidable pressure from established banking powerhouses such as JPMorgan JPM and Bank of America BAC. These institutions not only bring decades of customer trust and regulatory experience but are also rapidly expanding their digital capabilities to counter fintech disruptors.
JPMorgan has been actively investing in digital banking infrastructure, while Bank of America continues to enhance its mobile and AI-driven services to retain tech-savvy consumers. As SoFi scales, competing with legacy giants like JPMorgan and Bank of America alongside agile fintechs like Revolut, which is now pursuing a U.S. banking license, will remain a defining test of its long-term resilience.
Verdict: SOFI is a Buy
SoFi remains a compelling buy backed by its accelerating membership growth, effective product diversification, and a successful pivot toward a fee-based, capital-efficient model. Its growing scale, improving margins and innovative approach give it a distinct advantage in the evolving digital finance landscape.
While competition from established banks and fast-moving fintech rivals will remain a challenge, SoFi’s first-mover advantage, expanding ecosystem and operational discipline position it for sustained success. Long-term investors seeking exposure to the future of fintech may find SOFI shares attractive at current levels.
SOFI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
