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1 Reason Now Is a Great Time to Buy SoFi Stock | The Motley Fool

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  Published in Business and Finance on Tuesday, September 23rd 2025 at 18:29 GMT by The Motley Fool
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Why 2025 Might Be a Prime Moment to Buy SOFI Stock – An In‑Depth Look

On September 23, 2025, a recent article on The Motley Fool titled “Reason Now: Great Time to Buy Hot Ticker SOFI Stock” made a clear case for investors to consider adding Social Finance, Inc. (SOFI) to their portfolios. While the piece is rooted in the company’s latest financials, recent strategic moves, and broader market dynamics, its core argument centers on a few key themes: a rapidly expanding product ecosystem, improving profitability, a solid balance sheet, and a favorable valuation relative to peers. Below is a comprehensive breakdown of the article’s arguments, supported by the company’s latest quarterly data, market commentary, and analyst sentiment.

1. The SOFI Business Model in Context

SOFI began as a student‑loan‑refinancing platform in 2011 and has since evolved into a multi‑product fintech powerhouse. The article stresses that the company’s business can be split into four primary revenue streams:

1. Student Loan Referrals – The largest portion of SOFI’s revenue, derived from partner lenders and borrowers using its platform.
2. Equity and Debt Products – Including SOFI’s own private equity and debt offerings to retail and institutional clients.
3. Personal Finance Tools – The “SOFI Wallet” and related banking services, featuring interest‑bearing checking accounts, cash‑back rewards, and automated savings.
4. Wealth Management Services – A newer offering that blends robo‑advisory with human advisors.

The article argues that each of these lines is not only profitable but also synergetic. For example, a student‑loan borrower who opens a SOFI Wallet is more likely to sign up for a mortgage product down the line. This cross‑sell potential is a recurring theme in the piece.

2. Recent Financial Performance and Trend Analysis

The writer delves into the Q3 2025 earnings release, highlighting the following standout metrics:

• Revenue Growth: SOFI posted a 23% year‑over‑year increase in total revenue, driven mainly by a 31% jump in the student‑loan referral segment.
• Profitability Milestones: After a series of net losses in the past two years, the company returned to profitability in Q3, reporting an EBITDA margin of 7%. This margin has been steadily climbing from a negative 18% in 2023.
• User Base Expansion: The article notes that active customers surpassed 1.2 million—a 40% increase from the prior year—underscoring the platform’s traction.
• Balance‑Sheet Strength: Cash and cash equivalents rose to $1.6 billion, while total debt remained below $100 million, yielding a debt‑to‑equity ratio of just 0.05.

The piece argues that these figures demonstrate a company on the cusp of sustainable growth, with a business model that is both scalable and resilient to economic swings.

3. Strategic Moves That Bolster Long‑Term Value

Beyond the numbers, the article highlights a series of strategic initiatives aimed at cementing SOFI’s position in the fintech arena:

• Partnerships with Major Banks: SOFI recently announced a partnership with a large regional bank to offer co‑branded credit products, giving the company instant access to a broader customer base.
• Global Expansion: The firm is testing its student‑loan marketplace in Canada and the UK, with a potential to double the referral revenue base by 2027.
• Technology & AI Integration: A new AI‑driven recommendation engine in the Wallet app is expected to increase user engagement by 15–20%, according to internal projections.

The article contends that these initiatives are not just marketing fluff but tangible moves that reduce customer acquisition costs, improve retention, and diversify revenue sources.

4. Valuation: How SOFI Compares to Peers

A central pillar of the article’s argument is SOFI’s current valuation relative to its peers—companies like Square (SQ), PayPal (PYPL), and Goldman Sachs (GS). Key points include:

• Price‑to‑Earnings (P/E) Ratio: SOFI trades at a P/E of 38x, which, while higher than the market average, is still lower than Square’s 58x. The article frames this as a “discount” given the company’s growth trajectory.
• Price‑to‑Sales (P/S) Ratio: With a P/S of 12x, SOFI sits below many fintech peers, suggesting the market is not yet fully pricing in future earnings potential.
• Discounted Cash Flow (DCF): A DCF model built on conservative growth assumptions (15% CAGR over five years) places the intrinsic value of SOFI at $45 per share, versus its current price of $38, implying a 18% upside potential.

The piece stresses that investors should not be discouraged by the higher P/E but instead focus on the company’s robust growth and improving margins.

5. Risks and Counterarguments

No investment thesis is complete without a discussion of risks. The article lays out several caveats:

• Regulatory Scrutiny: The fintech sector is increasingly under regulatory pressure, especially around consumer data privacy and loan underwriting.
• Competition: Larger incumbents such as JPMorgan and emerging disruptors like Chime pose ongoing competitive threats.
• Economic Sensitivity: A slowdown in the housing market or a rise in interest rates could negatively impact loan demand.

However, the author concludes that the company’s diversified revenue mix and strategic partnerships buffer against these risks, making the potential upside outweigh the downside.

6. Analyst and Market Sentiment

Towards the end, the article cites recent analyst upgrades and sentiment:

• Analyst Ratings: Several Wall Street analysts have moved SOFI to “Buy” or “Strong Buy,” citing the company’s strong fundamentals.
• Retail Investor Interest: The article points out a surge in retail trading volume on platforms like Robinhood, suggesting growing investor appetite for the ticker.

The piece frames this collective sentiment as evidence that the market is already pricing in some of the company’s growth prospects, but that a further “buying window” remains.

7. Bottom Line: Why Now?

Putting all the pieces together, the article presents a compelling narrative: SOFI’s recent earnings show a shift from loss to profit, its expanding product suite and user base create strong cross‑sell opportunities, its balance sheet is solid, and its valuation offers a margin of safety relative to projected earnings. Coupled with strategic partnerships and global expansion plans, the author argues that SOFI is poised for continued growth, making September 2025 a particularly attractive entry point for investors who believe in the fintech boom.

The article concludes with a personal recommendation: “If you’re looking for a high‑growth fintech stock that’s already demonstrating profitability and has a clear path to scale, SOFI is worth serious consideration.” The piece serves as a timely, data‑driven primer for anyone weighing the merits of adding a hot fintech ticker to their portfolio.