Will SoFi Become a $30 Stock Again or Keep Languishing Below $20?
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I have generally been wary of characterizing stocks as “table pounders,” but last year I listed SoFi Technologies (SOFI) stock as one after shares fell below $25. However, while I made some good moves in SoFi — both on the buy and sell side — this one went quite wrong. Now, SOFI stock is languishing below $20 per share.
SOFI stock is now down 46% from its 52-week high of $32.73 and has underperformed badly this year. With that said, let’s look at SoFi’s forecast and examine whether the stock can rise back above the $30 price level.
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To begin, let’s examine why SOFI stock has been going down after peaking in November 2025.
First, the stock was always ripe for correction, as its valuations were a bit stretched last year. Then came the surprise $1.5 billion capital raise in early December, in which SoFi priced shares at $27.50. That was a discount to the then-prevailing stock price. In hindsight, however, it was a wise decision. Just as companies should ideally repurchase shares when they appear undervalued, raising growth capital at elevated valuations makes perfect sense.
SoFi’s selloff could also be attributed to the tepid sentiments towards cryptocurrency plays. Notably, SoFi relaunched its cryptocurrency trading business in November after a nearly two-year halt, but the timing was far from perfect. Digital assets have looked weak over the last few months, and the pessimism is reflected in the price action of other cryptocurrency trading plays like Coinbase (COIN) and Robinhood (HOOD).
SoFi did post a stellar set of numbers for the fourth quarter of 2025, but even that earnings report failed to cut ice with markets, and the stock plunged despite beating estimates. The broader market selloff amid the Iran war is not helping matters for SoFi, which is a high beta name and tends to rise or fall more than the broader markets. There are also concerns over the company’s credit quality amid the deteriorating macro environment. More recently, SoFi missed out on joining the S&P 500 Index ($SPX) — the world’s most popular index instead added Lumentum (LITE), Vertiv (VRT), Coherent (COHR), and EchoStar (SATS).
Over the last couple of years, SoFi has invariably traded above its mean target price, but the recent consensus target price of $26.88 is roughly 51% higher than current levels. Sell-side analysts have been apprehensive of SoFi’s valuation, and brokerages give it a consensus “Hold” rating. However, last month, Citizens JMP and JPMorgan both upgraded the stock to an “Outperform” rating while raising their respective price targets to $30 and $31.
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To be sure, the fall in SoFi stock is not totally unwarranted, as there are genuine concerns over credit quality. However, I believe the selloff has gone a bit too far, as SoFi has been diversifying away from the lending business and has doubled down on its capital-light tech platform and financial services business. Moreover, the company has stringent credit standards, and in Q4, the weighted average income of its personal loan borrowers was $158,000 with a weighted average FICO score of 746.
In hindsight, SoFi nearly perfectly timed its capital raise, and the company now has the balance-sheet strength to withstand the current turmoil. SoFi is among the cleanest growth stories out there and added over 1 million new members in Q4, closing the year with 13.7 million members. For context, that figure is more than 20 times its member count at the end of 2018. The growth flywheel is far from over, with the company guiding for the metric to rise by at least 30% this year.
SoFi’s valuations have taken a beating in the selloff, and SOFI stock trades at a forward price-to-earnings (P/E) multiple of 30.2 times, which looks quite attractive considering the 54% and 33% earnings growth the company is expected to witness in 2026 and 2027, respectively.
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While SoFi trades below the levels at which I started buying shares last year, I remain constructive on the stock and have been buying the dip. Of course, SOFI stock could remain volatile in the short term amid the evolving situation in the Middle East, and more downside cannot be ruled out. But I believe the crash is a good opportunity to own this fintech name, particularly for those investors who missed out on the rally in the preceding three years. SoFi has a chance of becoming a $30 stock by the end of next year, and I find its risk-reward quite attractive at these levels.
On the date of publication, Mohit Oberoi had a position in: SOFI. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
