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Where Is Sofi Heading In 2025? 3 Bold Predictions For Investors
SoFi (NASDAQ: SOFI) is one of my highest-conviction stock ideas as we head into 2025. Not only has the fintech company maintained fantastic growth momentum for several years, including during 2022's bear market, but its business seems to be at an inflection point in terms of profitability and mainstream adoption.
To be fair, it was difficult to narrow my predictions down to just three. For example, I think SoFi will surprise the market with its deposit growth, loan performance, and its Galileo tech platform, just to name a few. But here are my three top predictions, including how I think the stock will perform in 2025.
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1. SoFi's net income will double from 2024 levels
SoFi was on pace to produce about $205 million in net income for 2024. (We'll get its final results in a few weeks.) That's a big improvement from its $301 million net loss in 2023. It's also notably better than its original net income guidance range for the year, which had a midpoint of $100 million.
Through the first three quarters, SoFi's revenue increased by more than 20% compared to the prior-year period, and its adjusted EBITDA margin grew from 21% to 25%.
I foresee both revenue growth and further margin expansion in 2025. Falling interest rates could lead to higher demand for SoFi's loans and should also improve its net interest margins by lowering its deposit costs. I could list several other potential revenue catalysts, but the short version is that I think that net income will double to the $400 million range, which would translate to earnings per share of about $0.20.
2. SoFi will launch at least three major new products in 2025
SoFi hasn't just grown its customer bases in personal loans, checking accounts, and other long-established products. It has also done a great job of rolling out new banking products, as well as adding valuable features to them. Over the past year, for example, SoFi has launched two new credit card products and has added some unusual features to its investment platform.
With that in mind, I believe SoFi will have at least three significant new product launches in 2025. For one thing, there is still massive potential for it to expand its footprint in the credit card business, as none of its three existing credit card products are major standouts. The company has a relatively affluent customer base, so a higher-end SoFi credit card with unique perks could be a big hit. There are also some high-demand financial products that SoFi doesn't offer yet, such as CDs, auto loans, and college savings accounts.
To be clear, I have no idea what products SoFi has in development, but I'd be surprised if it doesn't have a few things in the works for this year.
3. SoFi will handily beat the S&P 500 this year
SoFi's stock price gained 55% in 2024, outperforming the S&P 500 by more than 30 percentage points. I'll make the bold prediction that not only will SoFi outperform the S&P 500 again in 2025, but that the stock will gain at least 20% regardless of what the broader market does.
Of course, for this to happen, a lot will need to go well. But if SoFi can continue to grow and expand its margins, 2025 could be another great year for its shareholders.
The bottom line
While these might sound like bold predictions, I'm not so sure they are. In the years since it went public in June 2021, SoFi has established an excellent track record of setting ambitious growth targets and then surpassing them.
This innovative financial services company has proven to be one of the best businesses to have gone public during the 2021 SPAC boom, and it is finally starting to get some appreciation from the market. But I think it still has a long way to go.
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Matt Frankel has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
