SoFi Technologies (SOFI): Revisiting Valuation After New NFL Partnership and National Brand Campaign Launch

If you own, eye, or even just root for SoFi Technologies (SOFI), you probably noticed the excitement swirling around their latest play. The company just inked a multi-year partnership with NFL MVP quarterback Josh Allen, launching a national campaign for its SoFi Plus membership right as the new football season kicks off. With Allen’s star power and key features like high-yield savings and bonuses, SoFi is making a bold move to stand out in the crowded fintech world, especially as ads featuring the Buffalo Bills superstar spotlight its all-in-one app on every major network and streaming platform.

There’s been plenty for investors to chew on even before this campaign blitz. SoFi Technologies has seen its stock climb over the year, with especially strong momentum picking up over the past month. The blend of steady revenue growth, expanding annual income, and headline-grabbing partnerships paints a picture of a company leaning into its growth story and aiming for more mainstream relevance.

So after this surge of brand energy, is the market underestimating what SoFi can accomplish, or are investors already paying up for future success?

Most Popular Narrative: 95.9% Overvalued

The prevailing narrative views SoFi Technologies as significantly overvalued compared to its fair value estimate, based on future growth projections and current market sentiment.

“Sofi upped its annual revenue growth guidance 2024 to 22%-23% YoY from an initial projection of 14%-16%. This upward revision reflects confidence in maintaining growth in lending and non-lending segments. Financial services products to the number of lending products went up two-fold from 3.1x in 2021 to 6.2x in 2024, demonstrating the efforts toward a more balanced and diversified revenue model.”

Ready to discover the real engine behind SoFi’s valuation hype? This narrative is built on ambitious growth targets and a reshaping business model. What secret assumptions drive such a massive disconnect from the current price? Explore the details and see which bold forecasts are fueling these sky-high numbers.

Result: Fair Value of $14 (OVERVALUED)

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

However, concerns about margin pressure and intense fintech competition could quickly challenge the bullish outlook if market trends shift or if SoFi’s growth engine stalls.

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

Another View: What Does the SWS DCF Model Say?

While one method points to SoFi being priced far above its estimated value, our SWS DCF model takes a fresh look using future cash flows. This approach also hints at overvaluation, but does it dig deeper into fundamental drivers? Which lens truly gets to the core of SoFi’s market price?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out SoFi Technologies for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own SoFi Technologies Narrative

If you see things differently or want to dig into the numbers yourself, you can shape your own narrative in just a few minutes. Do it your way.

A great starting point for your SoFi Technologies research is our analysis highlighting 2 key rewards and 1 important warning sign 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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