5 Reasons to Buy SoFi Stock Like There's No Tomorrow
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SoFi nologies (SOFI 1. 43%) has been a rising star ever since it opened its virtual doors in 2011, and SoFi stock is up 223% over the past three years. It's...
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July 9, 2025
06:38 PM
The Motley Fool
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SoFi nologies (SOFI 1. 43%) has been a rising star ever since it opened its virtual doors in 2011, and SoFi stock is up 223% over the past three years
It's growing at a rapid pace, and its all-digital financial services platform is quickly becoming a go-to banking choice for customers looking for easy-to-use services
It's a small outfit that's just getting started, and now could be a great time to buy s
Here are five reasons why
Image source: Getty Images
Rising membership The path to the top starts with attracting and engaging customers, and SoFi is doing a great job of bringing customers to its platform
It added a record 800,000 new members in the 2025 first quarter, a 34% increase over last year
SoFi targets young fessionals who are just getting started on their financial journeys
These are people with good jobs moving up in their careers who have a long trajectory of engaging with a financial platform ahead. 90% of the bank's deposits come from direct deposit, a recurring revenue for SoFi
So far, these customers are demonstrating loyalty, which bodes well for the future
SoFi recently launched a membership gram called SoFi Plus, and 90% of sign-ups were existing members in the first quarter
Of those members, 30% adopted a second duct within the first 30 days of registration
Increasing revenue SoFi has been growing at a rapid pace, especially for a bank
Adjusted net revenue increased 27% year over year in Q1 2025, an acceleration
There are multiple growth drivers, including lower interest rates, cross-selling, and new members
Stabilizing interest rates are resulting in a stronger lending segment, which is SoFi's core
Lending revenue increased 25% year over year in Q1, with a 15% increase in contribution fit
There was strength across, with loan originations up 69% for personal loans, 59% for student loans, and 54% for loans in the quarter
Revenue from financial services, which are the non-lending services outside of the platform setting, increased 101% over last year in Q1
Contribution fits were up 299%, and contribution margin expanded from 25% to 49%
Climbing fits As SoFi adds new users and generates higher sales, scale is leading to stronger fitability
It's also growing more of its revenue from lower-cost, fee-based services, specifically in the financial services segment
Fee-based revenue has increased from 26% of the total in 2021 to 41% of the total in 2025
It reported its first annual fit in 2024, and management is expecting it to keep increasing this year and beyond
Adjusted earnings per were $0. 06 in Q1, up from $0. 02 last year, and management is guiding for $0. 28 for the full year, up from $0. 15 last year
Wall Street is expecting EPS of $0. 28 this year and $0. 46 next year
Lower interest rates Interest rate cuts have boosted SoFi's lending, and those rates may continue to go down
Fed Chairman Jerome Powell said last week that he would have already made more cuts if not for the new tariffs, and the market is still expecting more rate cuts in the second half of the year
Lower interest rates make it easier for people and es to borrow money, boosting loans for SoFi and also boosting the economy, which is great for banks
That's great for SoFi in the short term, and it will help it build its and become stronger and more resilient for when the next inevitable economic event happens
The expanding platform SoFi has been able to shore up its by expanding into services outside its core lending segment
It continues to innovate and offer specialized financial services that appeal to its core market and make it stand out in a crowded sea of online banks
Most recently, it received accolades from investors for announcing that it will bring back cryptocurrency as a trading option on its platform
It had removed crypto due to regulatory concerns when it got its banking charter in 2023
On top of that, it's planning to offer self-serve global remittances, which are an alternative to international wire transfers, on the app over a blockchain network
It's also going to add more value-driven services that appeal to its clientele
SoFi stock is up 25% this year as investors get more excited its, but it has a long growth runway
Jennifer Saibil has positions in SoFi nologies
The Motley Fool has no position in any of the stocks mentioned
The Motley Fool has a disclosure policy.
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