- If you are wondering whether SoFi Technologies, with a last close of US$16.11, is a bargain or simply a buzzy ticker, this article breaks down what the current price might be implying about the company’s value.
- The stock has had a mixed run, with a 1.4% move over the last week, a 14.8% decline over the last 30 days, a 41.3% decline year to date, a 69.6% gain over the past year, and a 169.8% gain over three years, while the five year return sits at a 4.3% decline.
- Recent headlines have focused on SoFi Technologies as a listed consumer finance and fintech platform, highlighting its role in areas such as lending and digital banking services. This context helps explain why the stock has seen periods of strong interest alongside sharp pullbacks, as investors react to changing views on growth potential and risk in the sector.
- Despite that attention, SoFi Technologies currently scores 0 out of 6 on Simply Wall St’s valuation checks, as shown in its valuation score. The next sections will walk through different valuation approaches and then finish with a broader way to think about what this score might mean for you.
SoFi Technologies scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: SoFi Technologies Excess Returns Analysis
The Excess Returns model looks at how much profit a company can earn on its equity above its cost of capital, then capitalizes that “excess” to arrive at an estimate of value per share.
For SoFi Technologies, the starting point is an estimated Book Value of $8.26 per share and a Stable Book Value of $9.52 per share, based on weighted future book value estimates from 8 analysts. The model uses a Stable EPS of $0.87 per share, sourced from weighted future return on equity estimates from 9 analysts, and a Cost of Equity of $0.74 per share. That leaves an Excess Return of $0.13 per share, with an Average Return on Equity of 9.19%.
Using these inputs, the Excess Returns model arrives at an estimated intrinsic value of about $12.49 per share. Compared with the recent share price of $16.11, this implies the stock is about 29.0% overvalued on this measure.
Result: OVERVALUED
Our Excess Returns analysis suggests SoFi Technologies may be overvalued by 29.0%. Discover 61 high quality undervalued stocks or create your own screener to find better value opportunities.
Approach 2: SoFi Technologies Price vs Earnings
For a company that is generating positive earnings, the P/E ratio is a useful way to think about what you are paying for each dollar of profit. Higher P/E ratios often reflect stronger growth expectations or a lower perceived risk, while lower P/E ratios can suggest either muted growth expectations or higher perceived risk.
SoFi Technologies currently trades on a P/E of 42.68x. That sits well above the Consumer Finance industry average P/E of 8.27x and also above the peer group average of 13.95x. Simply Wall St’s Fair Ratio framework estimates what a more normal P/E might look like for SoFi Technologies at 21.12x, based on factors such as earnings growth, profit margins, industry, market value and risk profile.
This Fair Ratio is more tailored than a simple comparison with peers or the industry, because it adjusts for company specific characteristics rather than assuming all Consumer Finance businesses should trade on the same multiple. Comparing SoFi Technologies current P/E of 42.68x to the Fair Ratio of 21.12x suggests the shares trade at a materially higher level than this model would indicate.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your SoFi Technologies Narrative
Earlier it was mentioned that there is an even better way to understand valuation, so this is where Narratives come in: a simple way for you to attach a clear story about SoFi Technologies to the numbers you care about, such as fair value, future revenue, earnings, and margins, then see how that story stacks up against the current share price of US$16.11. A Narrative on Simply Wall St’s Community page is essentially your view of how SoFi’s business plays out, linked directly to a forecast and a fair value, so you can compare that fair value to today’s price and decide whether you see the stock as above or below what your story supports, and adjust over time as new earnings results or news arrive and the model refreshes automatically. For SoFi, one investor might lean toward a higher fair value, around the bullish US$38.00 view, based on stronger growth and margins, while another might anchor closer to US$12.37 on the cautious side, yet both are using the same tool, just different Narratives, to keep their decisions grounded in a consistent story plus numbers rather than headlines alone.
For SoFi Technologies, however, we'll make it really easy for you with previews of two leading SoFi Technologies Narratives:
These sit on either side of the current share price of US$16.11 and give you a clear sense of how different investors are tying their story about the business to a specific fair value number.
Narrative fair value: US$22.98
Implied pricing gap: about 29.9% below this narrative fair value
Revenue growth used in this narrative: 20%
- Frames SoFi as a consumer "financial super app" combined with a banking technology provider that powers other institutions.
- Emphasizes a low customer acquisition model, cross sell across lending, financial services and technology, and a focus on higher income borrowers.
- Highlights fee based technology and payments ambitions, including SoFiUSD and broader settlement infrastructure, as key parts of the long term story.
Narrative fair value: US$14.00
Implied pricing gap: about 15.1% above this narrative fair value
Revenue growth used in this narrative: 15.27%
- Focuses on SoFi's strong member and product growth, but pairs it with concerns about margin pressure as net interest margin has moved around.
- Flags competition from both traditional banks and other fintechs, along with regulatory and macro risks that could affect credit quality and product demand.
- Views the stock as exposed to pullbacks when expectations run ahead of fundamentals, particularly after strong share price moves.
Taken together, these two narratives show how different investors can look at the same company, the same share price and the same set of financials, yet come away with very different conclusions about what feels comfortable. If you want to see more versions of the SoFi story, including full forecast paths and valuation assumptions, the Community Narratives page gives you a broader range of viewpoints to measure against your own. See what the community is saying about SoFi Technologies
Do you think there's more to the story for SoFi Technologies? Head over to our Community to see what others are saying!
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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