Is SOFI a Best Buy Now Stock?

The stock market has been on a rough ride this past week, making investors nervous about the impact of tariffs and an economic slowdown. While the market volatility can impact your portfolio, it is also an opportunity to make the most of the dip. Many investors try to make the most of this challenge and see their investments grow over the decades. Buying shares on the dip is a brilliant move and one that even Warren Buffett follows. Fintech company SoFi Technologies (NASDAQ:SOFI) is down 36% from the peak and I’d recommend buying the stock. It will not stay down for long. 

The business model is a success

One of the biggest catalysts for SoFi Technologies is its business model. It is a digital financial services app that has seen steady member growth. The online app has made it easier for youngsters to manage their money and embark on their investment journey. The company started as a student loan lender but has expanded across different products and services. Today, it has become an integral part of our lives and made money management easier, more convenient, and safer. The company recently secured a $5 billion deal with Blue Owl Capital to enhance its loan business.

SoFi ended 2024 with 10 million members, a 34% jump year-over-year. Further, it saw the revenue jump 19% year over year in the fourth quarter too. The financial and tech services segment saw a 52% jump which generated 49% of the adjusted net revenue. SoFi reported its first profit in 2024 and went from a net loss of $341 million in 2023 to a net income of $499 million in 2024. This shows the company’s strength and resilience amidst the uncertain and competitive market. 

The one area where SoFi stands apart is customer retention. The management was aiming to end the year with 10 million members and it has successfully managed to achieve that. Further, it manages to cross-sell its products which helps improve the number of products per every customer and offers them value for money. It enhances customer satisfaction and retention. For 2025, it aims to add 2.8 million new members, a 28% upside from 2024.

Considering its steady growth, I believe SoFi will be able to add more than the targeted number of users. The company has the leadership which will continue to drive growth and see higher revenues. Going from a loss to a net profit in a short period of time is nothing but impressive and the company will maintain the profitability in the coming years. 

Stellar Fundamentals 

The strong performance in the loan business generated $969.9 million in fee-based revenue for 2024. All of us are banking on our phones and SoFi has a high appeal amongst the younger demographic. Financial services products jumped by 34% year over year while lending products increased by 21%. 

Exchanging hands at $13.07, SOFI stock is down 7% year-to-date but it is up 64% in the six months and 77% in the year. The stock may not see an immediate upside but an improvement in the market will boost SOFI. By steadily innovating and offering the latest features to users, SoFi will continue to attract and retain users. It expects to generate $725 to $745 million of adjusted net revenue and an EPS of $0.03 for the first quarter. 

Buy the dip 

Analysts are bullish on the stock and Needham has a price target of $20 with a Buy rating while BofA has a price target of $13. When compared with industry stalwart Visa Inc. (NYSE: V), which is up only 25% in six months and 23% in a year, SoFi looks like a better buy. While it does not offer the dividend or stability that Visa does, SoFi does offer higher upside potential and is available at a much cheaper rate. 

Buy SoFi in the dip and wait. The market is volatile and SOFI stock might see more ups and downs but it will stand strong in the next few years. The steady member growth and growing profitability put SoFi in line with some of the top financial institutions today. I think the stock is cheap and despite recession fears, it continues to show solid potential. 

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