The broader markets have rebounded on cooling recession fears. However, SoFi Technologies (SOFI) is trailing behind, with its stock trading about 14% lower year-to-date. While SoFi stock has underperformed, the financial technology company’s fundamentals remain solid, reflected through its consistently strong financial results, expanding member and product ecosystem, diversification towards fee-based earnings, and improved monetization. These factors are setting the stage for a major comeback in SoFi stock. 

While SoFi stock is trading near analysts’ average price target, at least one analyst expects it to climb to $20, the Street-high price target. This implies a potential upside of 50% from current levels. Let’s take a closer look. 

SoFi Delivered Strong Growth Across the Board

SoFi’s recent quarterly performance reveals that the company is firing on all cylinders. In the first quarter, revenue surged 33% year-over-year to $771 million. Earnings tripled, as all three of SoFi’s operating segments, including lending, financial services, and technology platform, delivered solid performance. 

Much of this growth is being driven by SoFi’s fast-growing member base, expanding product portfolio, and improved monetization. In Q1, SoFi added 800,000 new members, a 34% increase from the prior year, bringing the total to 10.9 million. Product adoption also remained solid as SoFi added 1.2 million products during the quarter, growing 35% year-over-year to 15.9 million.

Revenue generated by its financial services and technology platform segments climbed 66% year-over-year to $407 million, while its lending segment delivered adjusted net revenue of $412 million, up 27%. Lending activity hit new highs with $7.2 billion in originations for the quarter, including $1.6 billion from its loan platform business (LPB). 

Overall, fee-based revenue reached $315 million, up 67% year-over-year. SoFi has been aggressively diversifying its business model by ramping up income streams like referral fees, brokerage fees, interchange revenue, and origination revenue from its third-party loan production. This shift to capital-light income sources improves margins, reduces credit risk, and supports sustainable growth.

SoFi’s fastest-growing financial services segment is witnessing improved monetization. Revenue per product in this division rose nearly 50% year-over-year to $88 million. Within the financial services segment, the LPB, where SoFi originates loans for third parties, has scaled rapidly. It now runs at over $6 billion in annualized originations and generates more than $380 million in high-margin fee revenue.

SoFi has also been expanding its funding partnerships to support future growth. Deals with Blue Owl ($5 billion), Fortress ($2 billion extension), and a $1.2 billion joint venture with Fortress and Edge Focus are expected to boost originations significantly in coming quarters. Importantly, loans originated through LPB don’t carry ongoing credit risk for SoFi and serve as a powerful customer acquisition tool, helping SoFi to cross-sell other financial products.

On the profitability front, SoFi is performing well. All segments reported strong contribution margins in Q1, and total deposits grew to $27.3 billion. This influx of low-cost capital is helping lower funding expenses by over $500 million annually. Meanwhile, adjusted EBITDA climbed to a record $210 million for the quarter. 

SoFi’s Upbeat Guidance

Thanks to a strong start to the year, SoFi is on track to add over 2.8 million new members, at least 28% more than last year. It raised its adjusted net revenue forecast to between $3.235 billion and $3.310 billion, up from the previous estimate of $3.2 billion to $3.275 billion. This represents 24% to 27% year-over-year growth, slightly higher than its earlier projection of 23% to 26%.

SoFi also increased its adjusted EBITDA outlook to $875 million to $895 million, from the previous range of $845 million to $865 million. This reflects a 27% margin.

Its revised adjusted net income forecast is $320 million to $330 million, up from $285 million to $305 million. Accordingly, SoFi projects adjusted EPS of $0.27 to $0.28, compared to its earlier range of $0.25 to $0.27.

The Bottom Line

Wall Street remains cautious, with most analysts maintaining a “Hold” consensus rating. 

While analysts remain cautious, SoFi’s financials suggest that the company is evolving into a durable, diversified financial services platform. Its focus on growing its user base, deepening product engagement, and shifting towards fee-based revenue has created a powerful growth engine. As the company continues to scale, improve profitability, and attract institutional partnerships, its stock may soon begin to reflect the strength of its underlying business.