SoFi Technologies (SOFI) is flooding Instagram and TikTok with ads as it tries to shore up its Millennial and Gen Z consumer base, a move analysts say could pay off as younger users prioritize financial literacy.
KM Capital recently called the stock “massively undervalued” after a first-quarter sell-off triggered by weak guidance and a broader market slump.
“While the near-term environment is uncertain, the stock is massively undervalued with significant upside potential,” KM Capital wrote in a recent note.
“A 23%–26% expected FY2025 revenue growth looks very impressive, even compared to the actual FY2024 growth of 35%,” KM added.
While SoFi beat revenue expectations in Q4 2024, management warned that earnings would likely fall short.
The downbeat forecast, combined with the broader market sell-off, sent the stock tumbling nearly 50% through early April. But it’s clawing back.
On April 9, SOFI jumped nearly 20% after Trump signaled a potential pause on tariffs.
Looking past the noise of this rollercoaster, SoFi is carving out a key niche: younger consumers who are behind on their finances.
The company offers banking, investing, and lending services aimed at helping users reach their financial goals. By the end of 2024, its user base had climbed to 10.1 million — up 34% from the year before.
SoFi says its users have earned $1 billion in interest and paid off more than $33 billion in credit card debt.
Growth won’t stay at 30% forever. But if SoFi becomes the go-to finance app for Millennials, there’s still plenty of upside.
Generational pressure
Millennials and Gen Zers are living through a radically different economy than the one their parents had. Stagnant wages, crushing debt, and rising living costs have made financial independence feel out of reach.
Some Millennials are beginning to get ahead — finally buying their first homes — but Gen Z is still stuck on the sidelines.
A 2024 survey by Clever Real Estate found that 60% of Gen Zers worry they’ll never be able to afford a house. SoFi leans into that anxiety with its ad campaigns pitching financial education to doom scrollers on TikTok and Instagram.
The strategy works in two ways: it reaches digital natives who already manage their lives online, and it targets a cohort that now makes up over 60% of the U.S. workforce.
SoFi might have the right formula. The question is whether it can break out of the fringe and become a mainstream player in personal finance.
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