SOFI – why to enter and why to stay away

$SOFI is an interesting fintech name that over the past few years has transformed from a company focused on student loan refinancing into a full-fledged digital bank. Today it offers banking services, investing, lending and other financial products within a single app. It primarily targets millennials and Gen Z and positions itself as a tech disruptor and innovator of traditional banking.

On the other hand, there are reasons to approach this stock very cautiously.

Why SOFI is interesting:

SoFi Technologies, Inc. is building an "all-in-one" financial platform. Integrating multiple products into a single app increases customer engagement and cross-selling opportunities. In Q3 2025 the number of members reached 9.4 million (+35% YoY), which supports revenue diversification.

The company is also expanding into fast-growing areas—cryptocurrencies, private markets and international banking. Analysts expect revenue growth of around 25% for 2025, which is very dynamic for the banking sector.

Why be cautious:

Valuation is relatively stretched. At roughly 46x forward P/E, the stock is priced with significant expectations for further growth. Any slowdown could lead to a sharp correction, as we've seen in the past.

At the same time, it's a company highly sensitive to the economic cycle. As a fintech with significant exposure to consumer lending, SOFI is vulnerable when interest rates rise or during a recession. Competition is also intense—from traditional banks as well as digital players like Robinhood Markets, Inc..

Performance over the last 2 years (Feb 2024 – Feb 2026):

SOFI roughly +90% (from ~$10 to ~$19), but with very high volatility. In 2025 the stock gained more than 70%, however YTD 2026 it is roughly −27%, reflecting the volatility of the fintech sector.

For comparison: $^GSPC approximately +43.5% cumulatively (2024 +23.3%, 2025 +16.4%). NASDAQ 100 approximately +50–60% over the same period, with higher consistency thanks to the strong weight of tech leaders.

While SOFI can outperform indices in bull phases, long-term stability remains lower.

My view on a potential entry:

Personally, I would consider buying below $12, where a margin of safety against overvaluation increases. Conversely, I would view the area above $22 as a potential zone to take profits if the rally continues and valuation starts to limit further gains. I also add that I've never traded this stock and only became interested in it when investors on social media started presenting it as a "must-have" stock.

This stock fits rather into the more dynamic part of my USD portfolio. The potential is there, but the risk is significant in the current environment.

This post is only meant to share my personal market view and does not constitute investment advice. Every investor should do their own analysis and consider their investment horizon and risk tolerance before making a decision.

I also traditionally share the English version of this post on eToro for my followers and copy traders.

What do you think—does SOFI justify taking the risk, or is it better to stay away? Thanks in advance for your comments and opinions.