Business Overview - SoFi, originally founded as Social Finance in 2011, has evolved from providing student loans to a comprehensive digital banking platform offering auto loans, mortgages, personal loans, credit cards, insurance, estate planning, stock trading, and cryptocurrency services [3][4] - The company acquired Galileo, a digital payment processing firm, in 2020 and launched its own direct bank after obtaining a U.S. bank charter in 2022, which has helped attract a younger customer base [4] User Growth and Product Expansion - As of the end of Q3 2025, SoFi serves 12.6 million members with 18.6 million products in use, a significant increase from 2.5 million members and 1.9 million products at the end of 2021 [5] - Galileo operates separately and hosts nearly 160 million accounts, contributing to SoFi's overall growth [5] Financial Performance - From 2021 to 2024, SoFi's adjusted revenue is projected to grow at a CAGR of 37%, increasing from $1.01 billion to $2.61 billion, while adjusted EBITDA is expected to rise at a CAGR of 181%, from $30 million to $666 million [6] - Despite challenges such as the freeze on student loan payments and higher interest rates, SoFi has maintained strong growth [6] Revenue Generation - The majority of SoFi's profits come from interest and fees on loans, with additional revenue from securitizing loans, investment and brokerage fees, swipe fees from card network partners, referral fees, and subscription fees from its premium SoFi Plus tier [7] Market Position and Valuation - SoFi's fintech platform continues to attract millions of new users and is expanding its fee-based ecosystem to reduce reliance on interest income [8] - The stock appears reasonably valued, although there are concerns that Wall Street's expectations may be overly optimistic [8]

Core Insights - SoFi and Affirm are both high-growth fintech companies aiming to disrupt traditional financial institutions, with SoFi offering a wide range of financial services and Affirm focusing on "buy now, pay later" solutions [1][2] SoFi Overview - SoFi has expanded its services from student loans to include mortgages, auto loans, personal loans, credit cards, insurance, estate planning, stock trading, and banking, positioning itself as a comprehensive digital financial platform [1][4] - The company targets younger, digitally native users and has grown significantly, quadrupling its member base from 2.5 million in 2021 to 10.1 million in 2024, with projections to reach 12.6 million by Q3 2025 [7][8] - SoFi's revenue and adjusted EBITDA are expected to grow at a CAGR of 27% and 44% respectively from 2024 to 2027, driven by its loan platform business, increased deposits, and new features [9] Affirm Overview - Affirm's BNPL platform caters to younger and lower-income consumers, offering microloans without compound interest or hidden fees, and has seen significant growth, with active consumers increasing from 7.1 million in fiscal 2021 to 23 million in fiscal 2025 [10][11] - The company has secured partnerships with major merchants like Amazon and Walmart, contributing to its gross merchandise volume (GMV) growth from $8.3 billion to $36.7 billion during the same period [11] - Analysts expect Affirm's revenue to grow at a CAGR of 25% from fiscal 2025 to 2028, with adjusted EBITDA projected to increase at a CAGR of 131% through 2028, supported by the growing usage of its Affirm Card and international expansion [14] Valuation Comparison - SoFi has an enterprise value of $32.5 billion, trading at 31 times this year's adjusted EBITDA, while Affirm has an enterprise value of $27.2 billion, trading at 24 times this year's adjusted EBITDA [15] - Despite both companies being strong growth stocks, Affirm is considered more attractive due to its narrower focus, superior growth rates, and lower valuations [15]