SoFi Technologies Inc. (NASDAQ: SOFI) stock is down over 11% in mid-day trading after it delivered weaker-than-expected forward guidance in its fourth-quarter earnings report. This correction comes even though the fintech company delivered another strong report, with both revenue and earnings coming in higher sequentially and year-over-year (YoY). SoFi chief executive officer Anthony Noto described 2024 as the company’s “best year ever.”
The company is projecting adjusted net revenue growth between 23% and 26% in 2025. However, the company acknowledged that growth may come at the expense of earnings as the company plans to return capital expenditures back to 2023 levels.
On a day when broader technology stocks saw heavy selling, this correction may simply represent profit-taking after a sharp rally. If so, understanding SoFi’s strategy for 2025 is essential to assessing the opportunity in SOFI stock.
Shifting Back to Growth
There’s little doubt that 2024 was a milestone year for SoFi. The company delivered record adjusted net revenue of $2.61 billion, which was 26% higher on a YoY basis. The company also now has over 10 million members on one or more of the company’s platforms, and the company has been averaging 34% YoY growth in the last five years.
A key factor in the company’s success is its shift from a capital-heavy portfolio dominated by student loans to fee-based programs that are less capital-intensive. This transition is central to understanding SOFI stock's performance in 2025.
In a CNBC interview, CEO Noto highlighted 2025 as a year of reinvestment aimed at top-line growth. He identified the company’s investment, credit card, and insurance businesses as key areas for expansion. Additionally, SoFi plans to leverage its technology platform to further integrate its core money business, driving operational efficiency and scalability.
Traders Were Hoping for More
SOFI stock is up approximately 63% in the three months ending January 27, 2025. The stock is also outperforming fintech stocks, which are up approximately 21% since the election.
That makes it one of the biggest beneficiaries of the Trump trade, defined by stocks that have rallied sharply since President Trump was re-elected in November 2024.
However, SoFi remains a trader’s stock, with retail investors comprising the majority of shareholders. As of January 2025, institutional ownership was 38%, lower than comparable companies like Palantir Technologies Inc. (NASDAQ: PLTR), which boasts 45% institutional ownership after its inclusion in major indices.
Since obtaining its banking license in 2022, SoFi has struggled to maintain its appeal as a high-growth disruptor. Some traders express frustration with what they view as overly conservative guidance. Meanwhile, long-term income investors have largely avoided the stock due to the absence of a dividend.
That said, SoFi has built a reputation for underpromising and overdelivering, which could present a compelling opportunity for long-term investors as the stock overcorrects.
Getting Involved With SOFI Stock
SOFI stock may be a tough trade. As of this writing, the stock was close to dropping below its 50-day simple moving average (SMA). After a sharp run-up, it wouldn't be unusual for the stock to revert to its mean. Heading into earnings, the options chain for SOFI stock in the next two weeks was divided roughly equally between bullish and bearish sentiment.
While trading could be volatile, this pullback could set up an opportunity for long-term investors to get involved before it takes the next leg up. Although the consensus price target for SOFI stock is $11.71, there have been several recent bullish price targets, including one from Citigroup Inc. (NYSE: C), which reiterated its Buy rating while raising its target from $12.50 to $18.
