SoFi Technologies Stock Soars, But Does It Really Make Sense?

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SoFi Technologies (SOFI) — the fintech company out of San Francisco that decided to make banking cool, or at least pretend to — saw its stock skyrocket by 14% this morning. Why? Well, apparently, they beat analysts’ predictions in their second-quarter earnings report. But let’s take a moment here. Earnings? Sure, they beat expectations. But does that really mean the stock’s price should jump like it’s a one-hit wonder? Let’s dive in.

Analysts thought SoFi would post $0.06 per share on $804.4 million in revenue. Instead, they posted $0.08 and pulled in $858.2 million. Well, technically, $854.9 million, if you want to get picky about it, which I do. But, who’s counting? So, here we are, with the stock soaring. And, let me guess, the people who were holding on to this stock, probably against their better judgment, are now celebrating as if they’ve won the lottery. Calm down, folks. Let’s think this through.

SoFi’s Q2 Earnings

Looking at the GAAP numbers — you know, the numbers that really matter — SoFi posted a 43% year-over-year growth in revenue. Not bad, I suppose. But hold on. 700% growth in net income? What does that even mean? Okay, I get it — they earned $0.01 last year, and now they’re at $0.08. But is this sustainable? Are they going to keep this up, or is this just another fluke? And let’s not forget, they’ve been profitable for seven quarters in a row, which is… well, fine, I guess, but does anyone else smell something fishy about a company that’s been profitable for that long in this climate? Just saying.

Oh, and the “members.” They’re now up to 11.7 million. A 34% increase year over year. Great, SoFi’s got more customers. But what’s it going to cost them to keep these customers? I mean, growing a customer base is fine and all, but at some point, you have to start thinking about whether they’re actually profitable, or if they’re just another app with fancy marketing. Product growth is up 34% as well, which is all well and good. But come on, how many apps do you use on your phone that you downloaded for a week, then forgot about? I’m just saying — we’ve all been there.

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Is SoFi Stock a Buy?

So, it’s a good quarter. They’re doing well, I guess. But here’s the thing: the stock price has almost tripled over the last year. That’s right. Almost tripled. Now, if you’re one of those people who bought early, congratulations, you’re rich — for now. But for the rest of us, the question is: is this stock still worth buying? The market cap’s sitting at $23.2 billion. On $562 million in trailing earnings, that puts the P/E ratio at 41. 41! That’s pretty steep for a bank. You’d have to really love the idea of betting on continued growth to justify that kind of multiple. I mean, 41 times earnings? Seriously? The only thing with a 41 in it that makes sense is the highway number. 

Look, I get it, SoFi’s growing. But let’s be honest: how many times have we all heard about companies that seem like they’re going to keep growing forever, only to come crashing down? You know, like the one restaurant you went to that had a “unique” concept, but after the second visit, you realized they were just serving food in a bowl instead of a plate? Let’s not get carried away. Sure, the revenue’s growing at a blistering 43% a year, and earnings are up eightfold. But there’s no way this kind of growth can keep going, right?

Analysts predict earnings will triple over the next four years. Well, okay, maybe. But I’ve seen more optimistic forecasts than a horoscope at a fortune cookie factory. If they can actually hit those numbers, maybe it’s worth a shot. But remember — it’s a gamble. It always is. So, unless you’re just one of those “YOLO” investors who throws money at anything that’s moving, I’d think twice. In short: maybe it’s still a buy. Maybe not. But you really have to ask yourself: Do you feel lucky? Well, do you?

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2025-07-29 22:08