Is SoFi (SOFI) Still Overvalued After Its Strong Year-to-Date Rally?

SoFi Technologies (SOFI) has pulled back about 5% in the past week and 14% over the past 3 months, even though the stock is still up roughly 79% year to date.

See our latest analysis for SoFi Technologies.

The recent pullback looks more like a pause than a trend reversal, with SoFi’s 1 year total shareholder return of 68.13% and exceptional 3 year total shareholder return of 451.75% still signaling strong underlying momentum and improving sentiment around its growth story.

If SoFi’s run has you rethinking what financial disruptors can do, you might also want to explore fast growing stocks with high insider ownership for other high conviction ideas insiders are backing.

With shares still up strongly this year and trading only slightly below analyst targets, investors now face a key question: Is SoFi undervalued relative to its long term potential, or is the market already pricing in years of growth?

Most Popular Narrative Narrative: 80.5% Overvalued

Compared with SoFi Technologies last close at $25.27, the narrative pegs fair value far lower, implying that the current price bakes in aggressive expectations.

The bottom line is that SoFi’s recent performance underlines its continuing ability to produce sustained growth via innovation, diversification, and ecosystem expansion. At the same time, however, investors should look for possible short-term pullbacks with the stock now in overbought territory, compliments of recent strong performance and technical caution indications.

Read the complete narrative.

Curious what kind of revenue runway, profit margins, and future earnings multiple could still justify today’s premium price tag, despite that steep overvaluation signal? Explore the full narrative to unpack the bold growth path and valuation math driving its low fair value estimate.

Result: Fair Value of $14.00 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, softer net interest margins or a sharper slowdown in loan demand could quickly challenge the bullish growth assumptions that underpin today’s premium valuation.

Find out about the key risks to this SoFi Technologies narrative.

Build Your Own SoFi Technologies Narrative

If you see SoFi’s story differently, or would rather dig into the numbers yourself, you can build a fresh narrative in minutes with Do it your way.

A great starting point for your SoFi Technologies research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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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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