SOFI Stock Soars 163% in 6 Months: Should You Buy, Hold or Sell?

Core Insights - SoFi Technologies, Inc. (SOFI) has experienced a significant stock price increase of 163% over the past six months, outperforming the industry average of 26% [1] - The stock has surged 179% over the past year, indicating strong investor optimism [1] Membership Growth - SoFi added a record 850,000 new members in Q2 2025, bringing total membership to 11.7 million, a 34% year-over-year increase [3][7] - The company also added 1.3 million new products during the same period, reflecting a 34% year-over-year growth [3] - 35% of new products were adopted by existing members, showcasing strong cross-selling capabilities and product diversification [4] Revenue Model Transition - SoFi is transitioning to a capital-light, fee-based revenue model, which is viewed positively by investors for its sustainability and scalability [5] - Fee-based revenue increased by 72% year-over-year to $378 million in Q2 2025, driven by various income sources [5][8] - Annualized fee-based revenue now exceeds $1.5 billion, reducing reliance on interest income and mitigating exposure to interest rate volatility [8] Profitability Metrics - SoFi's adjusted EBITDA margin reached 29%, up 600 basis points year-over-year, indicating improved profitability [9] - The incremental EBITDA margin of 43% highlights disciplined cost control and operational efficiency [9] Earnings and Revenue Outlook - Analysts project a 60% increase in EPS for Q3 2025, with earnings expected to grow over 100% in 2025 [10][11] - Revenue forecasts indicate a 28.5% growth for Q3 and a 32% growth for the full year 2025, followed by 23.5% in 2026 [11] Competitive Landscape - SoFi faces competition from established banks like JPMorgan and Bank of America, which are enhancing their digital capabilities [14][15] - The competition from legacy banks and agile fintechs like Revolut poses a challenge for SoFi's long-term resilience [15] Investment Recommendation - SoFi is considered a compelling buy due to its accelerating membership growth, effective product diversification, and successful transition to a fee-based model [16] - The company's growing scale, improving margins, and innovative approach provide a distinct advantage in the digital finance landscape [16][17]