Has SoFi’s 2025 Rally Run Too Far Given Rich Valuation And Growth Expectations

• If you are wondering whether SoFi Technologies is still a smart buy after its big run, or if most of the upside is already priced in, you are not alone.
• The stock has cooled slightly in the very short term, down 0.4% over the last week and 1.6% over the last month. It is still up 109.5% year to date and 84.8% over the past year, with a 582.0% gain over three years and 167.6% over five years, which highlights how quickly sentiment can shift.
• Recent headlines have focused on SoFi expanding its product ecosystem, from broadening its banking and lending offerings to deepening its presence as a one stop financial app. This helps explain why investors have been willing to re rate the stock. There has also been ongoing attention on regulatory developments and competitive dynamics in digital finance, which provides important context for both the enthusiasm and the caution around its share price.
• Despite that momentum, SoFi currently scores just 0/6 on our valuation checks. In other words, the market price does not screen as a classic bargain on standard metrics. Next we will walk through discounted cash flow, multiples, and other lenses, and then finish with a more holistic way to think about what the stock might be worth.

SoFi Technologies scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: SoFi Technologies Excess Returns Analysis

The Excess Returns model looks at how much profit a company can generate above the return investors demand on their equity, then capitalizes those surplus profits into a per share value. It focuses less on short-term earnings and more on whether SoFi can consistently earn attractive returns on the equity invested in the business.

For SoFi Technologies, the model uses a Book Value of $7.29 per share and a Stable EPS of $0.70 per share, based on weighted future Return on Equity estimates from 5 analysts. The implied Cost of Equity is $0.62 per share, so the Excess Return is $0.09 per share. That is supported by an average Return on Equity of 9.14% and a Stable Book Value of $7.68 per share, using forecasts from 7 analysts.

When these excess returns are projected and discounted, the model arrives at an intrinsic value that is roughly 211.9% below the current share price, indicating the stock may be significantly overvalued relative to its forecast profitability.

Result: OVERVALUED

Our Excess Returns analysis suggests SoFi Technologies may be overvalued by 211.9%. Discover 912 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for SoFi Technologies.

Approach 2: SoFi Technologies Price vs Earnings

For profitable companies like SoFi, the price to earnings, or PE, ratio is a useful way to gauge how much investors are willing to pay today for each dollar of current earnings. A higher PE can be justified when a business is growing quickly and has relatively predictable profits, while slower growth or higher risk usually calls for a lower, more conservative multiple.

SoFi currently trades on a PE of 55.75x, which is far above the Consumer Finance industry average of 10.09x and also higher than the 41.72x average of its peer group. On the surface, that suggests the market is pricing in a lot of optimism about SoFi’s future earnings and competitive position.

Simply Wall St’s Fair Ratio framework goes a step further by estimating what a “normal” PE should be for SoFi, based on its earnings growth outlook, profitability, risk profile, industry, and market cap. This results in a Fair Ratio of 26.40x, which is much lower than the current 55.75x. Because this approach adjusts for company specific factors, it is more informative than simple comparisons to peers or the broader industry. With the market multiple more than double the Fair Ratio, this lens suggests that SoFi’s shares look stretched.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1442 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your SoFi Technologies Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, a simple way to connect your view of SoFi’s business story to a financial forecast and then to a Fair Value you can compare against today’s share price.

On Simply Wall St’s Community page, Narratives let you spell out your assumptions for SoFi’s future revenue, earnings, and margins. They then instantly translate that story into a Fair Value estimate that updates dynamically as new data, like earnings or news, comes in. This can help you decide whether the current price looks attractive, expensive, or about right.

For example, one SoFi Narrative might assume moderate 15.3% annual revenue growth, a 7.3% profit margin, and a Fair Value of $14.00 per share. A more optimistic Narrative could assume closer to 18.9% growth, roughly 20.0% margins, and a Fair Value near $26.61. This shows how two investors can look at the same company, apply different but reasonable stories, and reach very different conclusions about whether to buy, hold, or sell.

Do you think there's more to the story for SoFi Technologies? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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