SoFi Is Stuck Between a Bank and a Tech Stock — And That’s Why Wall Street Is Confused

SoFi Technologies has become one of those rare stocks that splits Wall Street cleanly down the middle.

Bullish analysts call it a breakout fintech powerhouse.

Bearish analysts insist it’s just an overvalued bank.

And in the middle sits a company that’s up 73% year-to-date, even after one of its sharpest pullbacks since January.

The debate is simple:

How do you value a business that’s no longer a traditional lender, but not fully a tech company either?

Because if SoFi is a bank, it looks ridiculously expensive.

If it’s a fintech platform, it looks meaningfully undervalued.

And the more you study the numbers, the more the story tilts toward the latter.

The Membership Flywheel That Won’t Slow Down

SoFi’s bull case starts with one number: members.

For 27 straight quarters, the company has reported record user growth — a streak even Big Tech companies struggle to maintain.

From 2019 to late 2025, membership didn’t just climb — it exploded.

SoFi’s user base grew nearly 18x in that period.

In Q3 2025 alone, nearly 1 million new users joined the ecosystem, pushing total membership to 12.6 million — up 34.8% year-over-year.

This isn’t vanity growth.

Members bring deposits.

Deposits fund loans.

Loans generate revenue.

Revenue turns into profits.

Once SoFi earned its national banking charter in 2022, this flywheel kicked into overdrive.

The company now holds $33 billion in deposits, a staggering achievement for a bank barely three years old.

Yes, that’s much smaller than Ally’s $143 billion.

But the trajectory is what matters — SoFi is accelerating while competitors are stagnating.

Operating leverage is beginning to show.

As long as deposits grow faster than expenses, SoFi’s margins will expand.

And they have been.

The Profitability Shift Wall Street Isn’t Pricing Correctly

Bears point to two valuation metrics:

Forward P/E ~45x

Price-to-Book ~3.6x

Compared to legacy banks trading around 1.2x book, SoFi looks wildly expensive.

But valuing SoFi like a brick-and-mortar bank is like valuing Tesla like a gas station — the comparison is structurally wrong.

Traditional banks don’t:

Grow members 35% per year

Increase revenue 38% in a single year

Expand EBITDA margins from 3% to 29% in four years

Operate as financial super apps with diversified revenue streams

Integrate crypto trading for younger demographics

Launch new products every quarter

Fintech companies do.

And fintech companies trade at premium multiples for a reason: they grow faster.

Credit Services peers trade around 4.8x book, which makes SoFi’s 3.6x actually look conservative.

Meanwhile, earnings growth is projected to climb nearly 60% in 2026.

If those numbers materialize, today’s valuation won’t look expensive —

it will look cheap in hindsight.

The Bear Arguments — and Why They’re Weakening

Yes, SoFi has risks.

About 9% of its float is shorted.

Margins could shrink in a falling-rate environment.

Its deposit strategy requires offering high APYs.

Marketing costs are creeping higher.

And skeptics worry about loan quality.

But here’s the data that matters:

90-day personal loan delinquencies dropped to 0.43% in September

Provisions for credit losses fell meaningfully year-over-year

Credit performance is improving, not deteriorating

This is not a company flying blind into a recession.

This is a company controlling risk far more effectively than its critics claim.

The Crypto Wildcard: A Bet Traditional Banks Can’t Make

In late 2025, SoFi became the first nationally chartered bank in America to let customers trade crypto directly.

This is a huge differentiator.

Younger customers don’t choose banks based on branch networks or 50-year-old brand loyalty.

They choose based on convenience, mobile features, speed, rewards, and access to emerging asset classes.

Traditional banks legally cannot copy this move right now.

SoFi can.

SoFi did.

And it’s a new revenue stream with massive long-term potential.

For a fintech company trying to win with Millennials and Gen Z, this is how you build loyalty.

Analyst Ratings: A Divided Wall Street

Analysts tracked by TipRanks rate SOFI as a Hold, with:

5 Buys

7 Holds

4 Sells

The average price target: $27.21, implying 2% downside.

But these ratings reflect the current industry confusion:

Banks think it’s a bank.

Tech analysts think it’s fintech.

And SoFi is somewhere in the middle — but leaning more toward tech every quarter.

Final Line

SoFi isn’t a perfect stock — it’s a volatile one.

But for long-term investors, volatility isn’t the enemy.

It’s the discount.

Between explosive member growth, rising deposits, expanding profitability, and a unique product roadmap, SoFi isn’t a traditional bank worth 1.2x book.

It’s a fintech super app in its adolescence — and the market hasn’t fully caught up yet.

Author’s Note

This article was created with the assistance of advanced AI — a tool I will continue using to analyze disruptors, decode financial narratives, and deliver deeper insight into the companies shaping the future of money.