TLDR
- Stock has tripled over 12 months on explosive member growth
- Added record 846,000 members in latest quarter
- Revenue jumped 44% year-over-year, fastest since 2022
- Student loan refinancing volume up 152% from two years ago
- Home loans grew 92% despite challenging rate environment
SoFi stock has become the talk of Wall Street after delivering a stunning 200% gain over the past year. The digital banking platform just reported its strongest quarterly performance ever, adding a record 846,000 new members.
This explosive growth pushed SoFi’s total membership to more than triple its 2021 levels. The company now serves millions of customers across lending, banking, and investment services.
Revenue growth accelerated to 44% year-over-year in the most recent quarter. This marks SoFi’s fastest expansion since 2022, proving the business model is hitting its stride.
The profitability story gets even better. SoFi’s adjusted EBITDA margin has skyrocketed from just 9% three years ago to an impressive 29% today. The company has posted consistent profits since late 2023.
Lending Business Powers Recovery
SoFi’s core lending operations are firing on all cylinders. The student loan refinancing business, which stalled during pandemic payment pauses, is roaring back to life.
Second quarter student loan volume jumped 152% compared to two years ago. This surge comes as borrowers resume payments and seek better rates through refinancing.
The home loan division delivered even more impressive results. Despite punishing interest rates that froze much of the mortgage market, SoFi grew home loans by 92% year-over-year.
This performance stands out in an industry where most lenders struggled. As rates begin declining, both purchase mortgages and refinancing could explode higher.
Strong Financial Foundation
SoFi’s balance sheet provides solid support for continued growth. The company maintains $5.1 billion in cash against just $4.0 billion in debt, creating a healthy 15% debt-to-equity ratio.
Net income margins reached 18.4% over the past four quarters, generating $562 million in profits. This compares favorably to the S&P 500’s average margin of 12.7%.
The stock currently trades at $23, near recent highs of $24.23. While the 8.3 price-to-sales ratio appears steep, analysts justify the premium based on the company’s 35% three-year average revenue growth rate.
Wall Street projects continued revenue expansion averaging 25% annually over the next three years. Some price targets reach $33 per share based on this growth trajectory.
Less than 10% of Americans currently recognize the SoFi brand, suggesting massive room for market share expansion. The company’s loan platform generates high-margin fees by originating loans for partner banks, creating a scalable revenue stream.
