SoFi: Five Years Hence (And a Few Dragons)

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SoFi Technologies (SOFI 0.92%). The name itself sounds like a particularly efficient spell for summoning minor financial deities. And deities they may need, given the complexities of the modern monetary landscape. It’s no longer ignorable, this… entity. A market capitalization of $32 billion is a significant pile of gold, even in these inflationary times, and its share price has been doing a rather enthusiastic jig – up 371% in the last 36 months (as of January 20th). A performance that would make even the most seasoned gnome banker raise an eyebrow.

But even dragons tire of circling. The stock is currently taking a breather, down 21% from its recent peak. Which brings us to the pertinent question: where will SoFi be in five years? Will it be soaring amongst the clouds, or… well, let’s not dwell on the alternatives. A sensible investor always considers the possibility of being eaten by something with teeth.

Expect Solid Growth (And the Inevitable Bureaucracy)

The financial services industry is, let’s be honest, a bit like a crowded marketplace. Everyone’s selling roughly the same thing – promises and numbers – and differentiating yourself is akin to trying to sell ice to an Eskimo. Yet, SoFi has managed to not only survive but thrive. Its growth metrics are… encouraging. As of September 30, 2025, it boasted 12.6 million customers. That’s nearly four times the number from the end of 2021. A truly impressive feat, considering the general public’s inherent suspicion of anything vaguely resembling responsibility.

It seems to be particularly popular with the younger and more affluent – a demographic that, historically, has been rather good at acquiring gold and avoiding goblin raids. They’re winning them over with an easy-to-use interface – a rare quality in financial instruments, which are usually designed to look deliberately intimidating. Management is forecasting adjusted net revenue of $3.5 billion in 2025, a 36% year-over-year increase. Which, if achieved, suggests many more years of robust top-line gains. Though one must always remember the Law of Diminishing Returns – eventually, even the most efficient gold-gathering operation runs into a mountain.

SoFi’s Profits Are Rising (And Avoiding the Tax Collectors)

Typically, when a business grows this rapidly, profits are an afterthought. Leadership focuses on expansion, throwing gold at the problem and hoping something sticks. Resources are diverted to marketing and product development, with the expectation that positive earnings will materialize… eventually. It’s a bit like hoping a particularly enthusiastic badger will dig you a gold mine.

Here’s where SoFi stands out. It’s projected to generate $455 million in adjusted net income in 2025 – double the previous year. This is, in part, due to the fact that it doesn’t operate physical bank branches. Avoiding brick and mortar is a shrewd move, considering the cost of mortar and the general unreliability of bricklayers. Soaring profits also suggest that management is exercising proper credit risk standards – a concept often overlooked in the pursuit of rapid expansion.

“I would like to invest a lot more than we’re investing,” CEO Anthony Noto declared on the third-quarter 2025 earnings call, “but we’re trying to balance both growth and being responsible for delivering profitability and good returns.” A remarkably sensible statement, and one that suggests a healthy respect for the fundamental laws of economics. Or, at the very least, a fear of angry shareholders.

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Is the Current Valuation Worth It? (Or Are We Building Castles in the Air?)

SoFi shouldn’t be valued like a traditional bank. That’s like comparing a griffon to a pigeon. It’s a tech-forward enterprise, rapidly gaining ground in the financial services industry. Based on current trends, its customer base, revenue, and profits are likely to be significantly higher five years from now. These favorable characteristics justify a more expensive valuation.

As of this writing, SoFi stock trades at a forward price-to-earnings ratio of 44.3. Not cheap, by any means. But it’s easy to be confident that SoFi’s impressive trajectory more than compensates for the starting valuation. I believe the shares should perform well over the next five years. Though, of course, one should always remember the inherent unpredictability of the market. Fortunes can be made and lost on the whims of dragons, after all.

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2026-01-24 16:22