Believe the Hype? Can SoFi Maintain Its 3-Month Rally?

Key Points

• Digital bank SoFi has more than doubled in value in three months, prompting investors to investigate whether the rally can continue.
• The company has numerous major tailwinds, including strong earnings and forecasts, a growing customer base and services line-up, cross-selling, and potential benefits from external regulations.
• Still, SoFi is valued at a premium, and uncertainty in the broader economy could translate to customer hesitation. 

Originally a student loan refinancing outfit, SoFi Technologies Inc. NASDAQ: SOFI has expanded its offerings to include mortgage and personal lending, credit card products, and more. Shares of the popular fintech name have far outperformed the broader sector in recent months, returning about 35% year-to-date (YTD) and roughly doubling in the last three months.

Investors may be understandably skeptical of a company that has performed so strongly, and particularly when it comes to whether or not SOFI shares can continue their upward trajectory. This may be especially the case here because about half of the analyst ratings for SOFI stock are either Hold or Sell, and because the firm's consensus price target is roughly 23% below where shares currently trade.

Multiple factors have likely driven the recent rally, including strong first-quarter earnings and forecasts, a record of profitability, the company's announcement of its re-entry into the crypto space, and more. There are plenty of reasons to be bullish on SoFi, although the company's sky-high valuation and broader economic uncertainty are potential barriers.

SoFi Notches a Banner 1H, Driving Shares Upward

A 33% year-over-year (YOY) improvement in revenue and tripling earnings per share (EPS) in SoFi's first-quarter earnings helped to set off its recent bullish run. The company's optimistic forecasts for quarterly and adjusted full-year revenue growth were also likely drivers back in April. What's more, analysts see the company's earnings more than doubling in the next year. Unlike many companies that have also gone public via special purpose acquisition company (SPAC), SoFi has shown its potential to be profitable since first posting GAAP net income in 2023.

SoFi continues to build its member base and has successfully expanded well beyond its initial target market of students and young professionals, although this demographic remains core to its operations as a digital bank. The firm ended the first quarter with nearly 11 million members, more than a third above the level one year prior.

SoFi also distinguished itself in the first half of the year with its new products and offerings. Most notably, the company recently announced it would re-launch a cryptocurrency service after previously shutting down its digital token functionality in 2023. The company appears to be going all-in on crypto. It has indicated plans to offer not only major players like Bitcoin and Ethereum but, eventually, stablecoins and other options as well. Crypto trading opens up a new revenue stream for SoFi and further cements its position as a "one-stop shop" for digital finance needs.

Fee-Based Revenue, Cross-Selling, and External Regulations

As SoFi has expanded its offerings, it has also begun to move away from a primarily loan-based model and toward one that derives revenue from various fees as well. This is a benefit to the firm as it reduces its reliance on a favorable interest rate environment, which is particularly important now as broader uncertainty surrounding rates remains elevated.

The company's broadening services have also been critical to its capacity as a cross-seller. With customers increasingly turning to SoFi for many more financial services besides loans, the company has positioned itself as an attractive partner for other firms seeking to integrate their offerings across its platform. This is a win-win for SoFi, as it continues to draw more customers and further bulks up its services while simultaneously driving revenue gains.

Another emerging tailwind for SoFi is the One Big Beautiful Bill signed by President Trump in July 2025. The budget reconciliation bill significantly limits federal student loans for many programs, a move that is assuredly going to send new customers toward private lenders like SoFi. This would be a boost to one of the company's original business lines. The bill may also push existing loan holders to refinance with private lenders, another potential win for SoFi and its rivals.

Investors may still be hesitant given SoFi's massive P/E ratio of 46.4. Further, customers may opt out of financial services in times of economic uncertainty, and with analysts at J.P. Morgan still suggesting that there is a 40% chance of a near-term recession, there may be significant risk at this point. It may come down to whether a particular investor feels SoFi's many positive attributes are enough to justify its valuation and the external risks.