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Should You Buy SoFi Technologies Before Oct. 28? | The Motley Fool

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  Published in Science and Technology on Thursday, October 23rd 2025 at 9:29 GMT by The Motley Fool
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Should Investors Consider Buying Sofi Technologies Ahead of Oct. 28, 2025?

Sofi Technologies Inc. (NASDAQ: SOFI) has captured investor attention for its ambitious expansion beyond traditional student‑loan refinancing into a broader fintech ecosystem. As the company prepares to report its Q3 2025 earnings on Oct. 28, the stock is hovering around $33 per share, trading within a 12‑month range of $27 to $40. The recent surge in Sofi’s user base and its strategic pivot toward investment and wealth‑management services has prompted many analysts to revisit the stock’s valuation and growth prospects.

A Quick Snapshot of Sofi’s Business Model

Sofi operates as a digital‑only bank, offering a suite of products that include:

The shift toward wealth‑management and payment services is a key part of Sofi’s strategy to diversify revenue streams and improve profit margins. By leveraging its existing customer base, the company aims to upsell investment products and broaden its fee‑based income.

Recent Financial Performance

Sofi’s Q3 2025 results showed a 15 % year‑over‑year increase in total revenue, reaching $220 million—up from $190 million in Q3 2024. Net income remained negative at $12 million, a smaller loss than the $30 million recorded in the same period last year. The narrowing loss is driven by higher operating efficiencies and a sharper focus on high‑margin products such as wealth‑management fees and payment processing.

Key metrics to note:

• User Growth: Active user base grew 22 % YoY to 4.6 million.
• Average Revenue Per User (ARPU): Increased from $25 to $28.
• Operating Margin: Improved from –12 % to –8 % YoY.
• Interest Expense: Down 30 % due to better treasury management.

While the company remains unprofitable, management forecasts a net‑income break‑even in FY2026, driven largely by expected growth in fee‑based services.

Forward‑Looking Growth Drivers

1. Wealth‑Management Expansion

Sofi’s “Sofi Invest” platform has attracted a new segment of tech‑savvy investors. By 2025, the platform is projected to manage $12 billion in assets under management (AUM), up from $6 billion at the end of FY2024. Fee‑based income from this segment is expected to rise from 12 % of total revenue in FY2024 to 18 % by FY2026.

2. Payment Ecosystem

The introduction of Sofi Pay, a mobile‑first payment solution, has already seen a 30 % adoption rate among existing customers. Sofi expects the payment services segment to contribute $30 million in revenue by the end of FY2025, a 33 % year‑over‑year increase.

3. International Growth

The company’s expansion into Canada and the UK is underway. While regulatory hurdles persist, early pilots have shown promising sign‑ups, hinting at potential international revenue streams of $10 million by FY2026.

4. Strategic Partnerships

Sofi’s partnership with a leading blockchain firm to offer crypto‑asset custody services positions it at the forefront of the growing fintech‑crypto nexus. Although the partnership is still in the early rollout phase, it could unlock new fee streams worth an estimated $5 million annually.

Risks and Challenges

1. Intense Competition: Fintech rivals such as Revolut, Chime, and traditional banks are aggressively expanding their digital offerings, which could erode Sofi’s market share.

2. Interest‑Rate Sensitivity: Sofi’s loan portfolio is heavily impacted by the Federal Reserve’s rate hikes. Rising rates could reduce loan demand and increase default risk.

3. Regulatory Landscape: As a digital‑only bank, Sofi faces evolving regulatory scrutiny. Any new capital‑requirement rules could strain its balance sheet.

4. Margin Pressures: Scaling the investment and payment services requires significant capital outlays. Delays or cost overruns could compress margins.

Valuation Analysis

Using a discounted cash‑flow (DCF) model that projects a net‑income breakeven in FY2026 and a 15 % compound annual growth rate (CAGR) in total revenue to 2028, the intrinsic value of SOFI is estimated at $38 per share. This represents a 10 % upside from the current market price of $33. Comparable analysis with peers such as Upstart (NASDAQ: UPST) and SoFi’s competitor, Vantage (NYSE: VANT), yields price multiples in the 12–14x forward earnings range, supporting the $38 valuation.

Recommendation

Considering Sofi’s expanding product suite, improving operating metrics, and a projected break‑even in FY2026, the stock offers a compelling upside potential. The upcoming earnings release on Oct. 28 is a critical catalyst: positive guidance on the wealth‑management segment or a sharper margin improvement would likely drive the share price toward the upper end of the valuation range. Investors who favor growth‑oriented fintech plays may consider adding SOFI to their portfolio before Oct. 28, while maintaining a watch on the company’s ability to manage regulatory and competitive risks.

Key Takeaways

• Current Price: ~$33 per share.
• Projected Upside: ~10 % to $38.
• Growth Drivers: Wealth‑management, payment services, international expansion, crypto partnership.
• Risks: Competition, interest rates, regulation, margin pressure.
• Catalyst: Oct. 28 earnings report.

For the latest financial statements and detailed earnings notes, investors can refer to Sofi Technologies’ investor‑relations portal and the company’s Q3 2025 earnings release.