'The market is wrong' on SOFI stock, says analyst. Here's why

SoFi Technologies (SOFI) is down 17.5% this year as the fintech pivots away from lending and doubles down on higher-margin financial services and technology.

The strategic shift may weigh on short-term earnings, but record revenue and surging user growth suggest the stock may be oversold.

In the first quarter, SoFi posted adjusted net revenue of $771 million — up 33% from a year ago and a new company record.

Meanwhile, its financial services segment brought in $303 million, while adjusted earnings jumped 46% to $210 million.

But of all the reported metrics, arguably the strongest signal of SoFi’s growth momentum lies in its growing user base.

The company added over 800,000 new members during the quarter, pushing total membership to a record 10.9 million — up 34% year-over-year and more than double its 2022 levels.

That’s one of the most important yardsticks for a neobank like SoFi, which aims to serve as an all-in-one finance app for digital-first users.

As the number of users grows, so does engagement, product adoption, and retention, all of which drive down service costs and lift long-term profitability.

So far, however, user growth has fallen on deaf ears on Wall Street as investors sold off the stock due to SoFi’s lowered profit forecast for 2025 and broader market jitters.

“The market is wrong” on SoFi, says analyst

Some analysts argue the selloff is overdone.

"The short-term unknowns are what create the opportunity," said Travis Hoium of Asymmetric Investor, who believes investors are missing the bigger picture.

“Long term, this is a company that’s going to be a much more profitable business, much bigger business, much more of a platform business — which is going to be high margin,” Hoium said.

SoFi’s competitive savings rates, zero-fee structure, and broad product suite continue to attract users — especially younger consumers looking to consolidate their financial lives in a single app.

Since its founding, the company says it has helped users earn over $1 billion in interest and pay down $33 billion in credit card debt.

That kind of user value is why analysts at KM Capital say SoFi is “massively undervalued”, especially with full-year revenue growth projected between 23% and 26%.

For investors able to stomach short-term volatility, SoFi’s long-term thesis remains intact, and possibly underpriced.