Is SoFi Stock a Buy Following Another Better-Than-Expected Quarter?

Core Insights - SoFi Technologies has experienced significant growth, with shares more than doubling since April, raising investor interest in its future potential [1][2] - The company reported second-quarter adjusted earnings of $0.08 per share, exceeding Wall Street expectations by 33% [2][8] - SoFi's net revenue for the second quarter increased by 44% year over year, prompting management to raise its revenue outlook for the year to $3.375 billion [8] Growth Metrics - SoFi's customer base grew from over 10 million at the beginning of 2025 to 11.7 million by the end of June, with financial products managed increasing by 34% year over year to 17.1 million [6] - The company aims to add at least 3 million new members in 2025, which would represent a growth rate of slightly below 30%, the slowest since its inception [10] - SoFi's deposit base is approximately $30 billion, about one-fifth the size of Ally Financial's, which has over 11 million customers [5][7] Financial Performance - The adjusted earnings for the second quarter were significantly above expectations, and GAAP earnings are projected to reach $0.31 per share in 2025, an 11% increase from previous guidance [8] - SoFi originated $54 billion in unsecured personal loans over the past five years, with $22 billion remaining unpaid, reflecting a manageable loss rate of 4% [12] Market Position and Competition - SoFi is rapidly expanding and may soon surpass Ally Financial as the largest all-digital bank by customer count [5] - The company's marketing efforts have been effective, but the potential for continued growth may be limited by the U.S. adult population size [11] Valuation Concerns - SoFi's stock is currently trading at about 80 times this year's earnings estimate, raising concerns about its high valuation [9] - The company has not been tested in a prolonged recession, which could impact its performance, especially in unsecured loans [12]