SoFi Technologies (SOFI) Deep Research Report: Dilution, Growth, and Risk: What 2026 Investors Need to Weigh

At first glance, SoFi Technologies looks like the kind of fintech story growth investors dream about: rapid revenue expansion, a slick all-in-one app, a national bank charter, and eight straight quarters of GAAP profitability as of Q3 2025. The numbers are eye-catching. Net revenue ramped from $353.8 million in Q1 2022 to $1.27 billion in Q3 2025, while adjusted EBITDA margins hovered around 28–29%, according to the 10-Q (2025), filed November 6, 2025.

But when we peel back the layers and line up the financials, filings, and recent capital raises, the picture for new investors in early 2026 is more nuanced. At a recent price of $25.49, SoFi trades at 46.6x trailing EPS and 3.4x book value, with an enterprise-value-to-EBITDA multiple in the 70s. Those are growth-stock terms for a business that still leans heavily on balance-sheet lending, is structurally capital-intensive, and just ran two $1.5 billion common stock offerings in mid and late 2025.

From our perspective at DeepValue, this is exactly the kind of setup where disciplined investors can get trapped into paying for “platform” economics that haven’t fully shown up yet. The upside case is real, especially if SoFi’s fee-based and technology businesses hit their stride. But the market already prices in a lot of that future.

In this piece, we walk through SoFi’s business model, growth drivers, valuation, and risk profile, and explain why we currently rate the stock a “WAIT” with a 6–12 month reassessment window rather than a straight buy or sell.

SoFi’s business in plain English: more bank than pure fintech

SoFi today is not just a flashy app for student loan refinancing. It’s a multi-segment business:

• Lending: personal loans, student loans, home loans, and loan servicing—funded predominantly by deposits at SoFi Bank, N.A.
• Financial Services: SoFi Money (cash management), SoFi Invest, credit cards, the Loan Platform Business (LPB), and related services.
• Technology Platform: Galileo and Technisys, which provide banking-as-a-service (BaaS) and core banking software to other fintechs and financial institutions.

The company’s evolution is documented in detail in the 10-K (2025), filed February 24, 2025 and the 10-K/A (2022), filed May 2, 2022. SoFi started in 2011 as a student-loan refinancer, then layered in personal loans, mortgages, investments, and credit cards. The big strategic leap came with:

• The acquisition of Galileo in 2020, a payments and BaaS platform.
• The acquisition of Technisys in 2022, a cloud-native core banking provider.
• Obtaining a national bank charter through Golden Pacific Bancorp, which allowed SoFi to originate loans directly in SoFi Bank and fund them with consumer deposits.

That bank charter is not just a badge of legitimacy. It gives SoFi access to low-cost, FDIC-insured deposits and broader funding channels, including the Federal Home Loan Bank (FHLB) and the Federal Reserve. According to the 10-Q (2025), SoFi ended Q3 2025 with:

• $30.8 billion in interest-bearing deposits at an average cost of 3.41%.
• $3.9 billion of total debt at 4.22%.
• A net interest margin (NIM) of 5.84%.

That roughly 190 basis point funding cost advantage over warehouse lines is a big part of the SoFi bull case.

The other leg of the story is the “Financial Services Productivity Loop.” Management emphasizes that as members adopt more products, SoFi’s customer acquisition cost per product declines and revenue per user increases. In Q3 2025, members and products were up 35% and 36% year over year to 12.6 million and 18.6 million, respectively, and about 40% of new products came from existing members, per the 10-Q (2025). That cross-sell engine underpins the platform narrative.

The growth story: strong, but not quite “AWS of fintech” yet

On headline numbers, SoFi looks like a growth machine. The 10-Q (2025) and 8-K (2026), filed January 9, 2026 outline:

• Q3 2025 net revenue of $962 million, up 38% year over year.
• Adjusted net revenue of $950 million, also up 38%.
• Adjusted EBITDA of $277 million, a 29% margin.
• Full-year 2025 guidance for about $3.54 billion in adjusted net revenue (+36% YoY) and about $1.035 billion in adjusted EBITDA (29% margin).

SoFi has also delivered eight consecutive GAAP-profitable quarters with Q3 2025 net income of $139 million (EPS $0.11), according to the 8-K (2026). That profitability milestone is what shifted much of the media narrative from “can they ever make money?” to “this is a scalable digital bank platform.”

But when we dive into segment-level performance, the story gets more complicated.

Lending still does the heavy lifting

In Q3 2025, the Lending segment generated:

• $493 million of net revenue.
• $262 million of contribution profit.

By contrast, the Technology Platform produced:

• $115 million of net revenue.
• Only $32 million of contribution profit.

Those numbers, again from the 10-Q (2025), show two things:

1. Lending is still the earnings engine, even after a big diversification push.

2. Galileo/Technisys are not yet operating like a high-margin, high-growth SaaS business.

Enabled accounts on the Technology Platform actually slipped from 160 million to 158 million, and contribution profit has been essentially flat. Over the first nine months of 2025, Technology Platform contribution profit grew only about 2%, despite the lofty “AWS of fintech” positioning.

From our point of view, that doesn’t kill the long-term tech story—but it absolutely limits how much of a “platform multiple” we’re willing to pay here and now.

Non-lending revenue mix: heading in the right direction

The good news is that SoFi isn’t just an unsecured lender anymore. The company has steadily increased the share of revenue coming from Financial Services and Technology Platform:

• By Q4 2024, those segments contributed 49% of adjusted net revenue.
• By Q2–Q3 2025, they formed a majority of quarterly revenue as fee-based income scaled and Lending’s percentage declined, according to the 10-K (2025) and 10-Q (2025).

The Loan Platform Business (LPB), in particular, is a key capital-light growth lever. It drives:

• Referral and servicing fees on loans originated off-balance sheet.
• Growth in SoFi’s partner network (e.g., Fortress and others).
• A path to scaling lending economics without tying up more SoFi capital.

Management is targeting more than $13 billion in annualized LPB originations and a fee run-rate of around $660 million over the medium term, as discussed in the 10-K (2025). If LPB and other Financial Services revenue can keep outgrowing Lending, SoFi’s mix will gradually become more capital-light.

That’s a big “if,” and it’s one of the main swing factors in our scenario analysis.

Is SOFI stock a buy in 2026 at current prices?

This is where the growth story meets the valuation table—and where our enthusiasm gets tempered.

At a share price of $25.49 and a market cap of about $32.1 billion, SoFi trades at:

• P/E: 46.6x trailing EPS of $0.46.
• EV/EBITDA: 72.5x.
• P/B: 3.4x.
• ROE: 5.68%.

Those metrics are pulled from our analysis of the 10-K (2025) and the latest quarterly filings. These are premium valuations, more in line with high-quality, asset-light fintechs or software businesses than with a capital-intensive consumer lender—even a fast-growing, tech-enabled one.

We built a base/bear/bull scenario framework over a 6–18 month horizon:

Base case (55% probability)

• Implied value: $24 per share.
• Assumptions: mid-20s revenue growth, high-20s EBITDA margins, periodic but smaller equity raises.
• Narrative: growth remains strong, but the overhang from capital needs and dilution caps multiple expansion.

Bear case (25% probability)

• Implied value: $18 per share.
• Assumptions: mild recession, personal-loan losses drift toward SoFi’s 7–8% life-of-loan expectations, NIM compresses, and management prioritizes capital protection over growth.
• Narrative: credit and macro pressure expose the cyclicality of the lending-heavy model.

Bull case (20% probability)

• Implied value: $32 per share.
• Assumptions: non-lending segments exceed 60% of revenue, LPB scales rapidly, and Galileo/Technisys margins inflect.
• Narrative: capital-light fee and tech revenues drive ROE higher, allowing the stock to sustain or even expand its growth multiple.

With the stock currently in the mid-$20s, upside to our bull case is limited versus the downside risk implied in the bear case. On a conservative value-investing lens, we do not see a robust margin of safety at this price.

Our internal guardrails:

• Attractive entry zone: around $20 per share.
• Trim zone: above $32 per share.
• Rating: WAIT, with a 6–12 month reassessment window.

This isn’t a judgment that SoFi is a bad business; quite the opposite. It’s a recognition that you’re paying up for a lot of things to go right—high growth, stable credit, expanding non-lending mix, and no major capital missteps—at a time when repeated equity raises and macro uncertainty are very real.

The capital question: strength today, dilution tomorrow?

Capital is where the SoFi debate gets heated, and where we think many bullish narratives gloss over important details.

Strong ratios… but fueled by equity issuance

On the surface, SoFi’s capital position looks robust:

• Tangible book value per share reached $5.97 by Q3 2025.
• CET1 capital ratio at SoFi Bank was about 20.0% at September 30, 2025, up from 16.0% at December 31, 2024.
• Regulatory ratios for both the bank and the holding company are comfortably above “well-capitalized” thresholds, per the 10-Q (2025).

But that CET1 jump was driven “primarily by a $1.7 billion common stock issuance and net income,” not organic capital build alone, according to the same filing. On top of that, SoFi executed:

• A $1.5 billion common stock offering in July 2025.
• Another $1.5 billion stock sale in December 2025.

Coverage from outlets like MarketWatch, December 2025 and Barron’s, August 2025 highlights how each raise triggered immediate sell-offs and ignited worries about recurrent dilution.

Management has been explicit in filings like the 10-K (2025): equity and convertible debt are normal tools in the capital stack and may be used again, even acknowledging that they could cause “significant dilution” and carry superior rights to existing stock.

From a value-oriented perspective, that’s a structural feature of the model, not a one-off event.

Why this matters for investors

Repeated large equity raises have a few implications:

• They cap near-term rallies, as we’ve already seen: every time the stock runs, investors start to worry about another offering.
• They slow per-share value accretion, even if absolute earnings and book value are rising.
• They signal that SoFi’s growth is still balance-sheet hungry. The longer it takes for retained earnings and fee-based businesses to shoulder more of the funding needs, the more you need to budget for future dilution.

This is a key reason our rating is WAIT rather than BUY. For us to feel more constructive at this price, we’d want to see at least two quarters where:

• CET1 improves mostly from retained earnings.
• Non-lending segments consistently represent >50% of adjusted net revenue with expanding contribution margins.
• No new $1 billion-plus equity or convertible offerings are announced.

If SoFi can clear that bar, the risk/reward tilts more favorably.

Credit quality and macro: the quiet risk in the background

SoFi’s bull case rests heavily on a “prime credit” story, and the filings largely support that—so far.

Current credit profile

The 10-K (2025) and 10-Q (2025) show:

• Weighted average origination FICO of 750 for the loan book in 2024.
• Improving credit card delinquency metrics after tighter underwriting and risk mitigation.
• Current charge-offs in personal and student loans below the company’s 7–8% life-of-loan loss assumptions.

That’s a solid starting point. It suggests SoFi is not reaching deep into subprime territory to drive growth, which reduces the odds of a catastrophic credit event in a mild downturn.

What could go wrong

Our bigger concern is what happens if the macro picture sours:

• A mild recession or prolonged weakness in employment could push personal-loan losses toward or above the 7–8% life-of-loan framework SoFi uses.
• That would force higher CECL allowances and hit GAAP earnings, potentially compressing CET1 if not offset by new capital.
• In a tougher funding environment, tapping equity markets may become more expensive or less feasible, raising the risk of capital constraints.

We flag three downside boundaries where capital impairment risk becomes material:

1. Credit deterioration beyond underwriting models that materially erodes CET1.

2. Tight capital markets, where equity/debt issuance is either too costly or unavailable.

3. Revenue mix reversal, where non-lending segments fall back below 50% of revenue and Lending remains the dominant driver without enough capital-light fee growth.

If any combination of these hits while the stock still trades at a rich multiple, permanent capital impairment risk rises sharply.

This is where tools like DeepValue can help individual investors keep pace: by automatically ingesting new 10-Qs and stress-testing charge-off and capital scenarios instead of trying to do it manually every quarter.

Will SoFi deliver long-term growth without blowing up the share count?

The longer-term (2–5 year) question isn’t just “will SoFi grow?”—we’re reasonably confident it will. The real question is how it grows and who captures the value: the business or existing shareholders.

We’re watching three structural milestones:

1. Galileo/Technisys economics

Can the Technology Platform segment accelerate revenue and contribution profit, and return to growth in enabled accounts beyond the recent 158 million level? If Galileo/Technisys remain a low-teens growth, flat-margin business, the “AWS of fintech” re-rating thesis loses credibility.

2. Cycle-tested credit

Will SoFi keep personal- and student-loan charge-offs within its 7–8% life-of-loan assumptions through a full macro cycle? If credit weathers a downturn without CET1 falling near regulatory minima, the bank’s risk profile looks much more durable.

3. Self-funding growth

Can retained earnings, securitizations, loan sales, deposits, and LPB fees fund most of the growth, so that large equity offerings become the exception, not the rule? That’s the pathway to higher ROE and potentially a more justified premium multiple.

Our medium-term roadmap, drawn from the 10-K (2025) and DEF 14A (2025), filed April 15, 2025, also includes:

• Non-lending segments sustaining >50% of adjusted net revenue with faster growth than Lending.
• LPB scaling its fee run-rate and diversifying partners beyond 2026.
• Progress toward a 2026 EPS target range of $0.55–$0.80 and clarity on how much external capital is needed to support that.

If those pieces fall into place, SoFi could justify its current valuation—or more. But at today’s price, we’d rather see more evidence before committing fresh capital.

Market sentiment: from “blockbuster” to battleground

We also pay close attention to how the market narrative evolves, because it shapes both multiples and volatility.

According to coverage summarized in our report, outlets like the Wall Street Journal and Nasdaq (Zacks) have recently framed SoFi as a maturing, high-growth digital bank with “scalable profitability,” raising 2025 guidance and beating on growth and margins. See, for example, the Wall Street Journal, November 2025 piece on raised profit outlook and Nasdaq (Zacks), November 2025.

At the same time:

• MarketWatch, December 2025 and The Bear Revolt, July 2025 highlight a pattern where every capital raise hits the stock hard.
• Economic Times, January 2026 and TipRanks, November 2025 note that the shares slid about 20% over a few weeks despite upbeat fundamentals and upgraded guidance.
• Some coverage now flags SoFi as a “crypto proxy”, given its deeper push into crypto, blockchain remittances (e.g., SoFi Pay to Mexico), and alternative investments like funds offering exposure to OpenAI and SpaceX, as reported by Investopedia, July 2025.

The net effect: sentiment has shifted from near-uniform enthusiasm to a more divided, battleground stock. Bulls see a durable, scaled platform; skeptics focus on valuation, dilution, and crypto-driven volatility. For disciplined investors, that split is often a reason to slow down and insist on a better margin of safety before jumping in.

If you want to evaluate SoFi alongside other “popular but polarizing” names, Read our AI-powered value investing guide to see how you can systematize this kind of narrative versus fundamentals analysis using automation rather than gut feel.

Key risks to monitor in 2026

For those who already own SoFi—or are determined to build a position—risk management will matter more than price targets. We’re watching several thesis breakers and early-warning indicators over the next 12–24 months.

Potential thesis breakers

Any of the following would seriously undercut the bullish platform narrative:

Credit blowout

By Q4 2026, personal and student loan net charge-offs sustained above 7–8% on a life-of-loan basis, or a sudden jump in allowances that pulls CET1 toward minimums.

Regulatory action

Any OCC, Federal Reserve, CFPB, or other regulatory action that materially restricts SoFi’s ability to originate, hold, sell, or securitize loans—or that forces sharp cuts to crypto/blockchain or LPB activity—would undermine the growth and diversification roadmap.

Repeat mega-dilution

Two or more additional equity or convertible offerings of at least $1 billion each between now and end-2026, without a commensurate jump in earnings power or capital requirements, would confirm that the model is structurally equity-hungry and impair per-share value.

90-day and 180-day checkpoints

We break near-term monitoring into two time windows:

Next 90 days (next 10-Q)

• Does CET1 improvement come mostly from retained earnings? If capital ratios slip again despite the 2025 raises, dilution risk goes up.
• Do personal and student loan delinquencies and charge-offs stay stable? Any meaningful uptick would prompt us to raise required returns.
• Do Financial Services and LPB revenue keep growing >50% year over year? If not, the diversification thesis weakens.

Next 180 days (two reporting cycles)

• Are non-lending segments consistently >50% of adjusted net revenue with improving margins? That would validate the platform pivot.
• Do we avoid another $1 billion-plus equity or convertible offering? If one appears into a flat or declining share price, we’d treat that as a strong negative signal.
• Does Technology Platform revenue and contribution profit accelerate, with enabled accounts returning to growth? If it remains flat, we’d strip out most “AWS of fintech” upside in our valuation.

If tracking all of that across quarters and filings sounds time-consuming, it is. That’s exactly the kind of work we built DeepValue to automate, by ingesting 10-Ks, 10-Qs, and 8-Ks and surfacing changes in credit metrics, capital ratios, and segment economics without you needing to comb through hundreds of pages.

So where does that leave investors?

Putting it all together, here’s how we at DeepValue see SoFi in early 2026:

• The business quality is improving. SoFi has real advantages in funding costs, a growing member base, a diversified product suite, and a credible path to more fee-based and technology revenue.
• Growth and profitability are impressive. Sustained 30–40% adjusted revenue growth with 28–29% EBITDA margins and GAAP profitability is no small feat in a tough rate and regulatory environment.
• The valuation already assumes a lot: that this growth continues, that credit remains benign, that fee/tech mix keeps climbing, and that the company can gradually reduce its reliance on equity issuance.
• Capital intensity and dilution are the main friction points. As long as the model requires periodic $1–$1.5 billion stock offerings, rallies will be capped and per-share value creation will lag headline growth.

For long-term, risk-tolerant investors, SoFi can absolutely make sense as a small, sized position—especially if you’re comfortable with volatility and willing to hold through cycles. But for investors looking for classic value-style asymmetry—a wide gap between price and conservative intrinsic value—SoFi at $25+ is not offering that today, in our view.

Our stance:

• Rating: WAIT.
• Preferred buy zone: closer to $20, or after we see clear proof that growth is increasingly self-funded and fee-driven.
• Reassessment window: 6–12 months, centered around full-year 2025 results, initial 2026 guidance, and the next 2–3 quarters of capital and segment data.

If you’re considering building or adding to a position, we’d encourage you to:

1. Be explicit about what has to go right (fee mix, tech traction, credit, capital discipline) for your thesis to work.

2. Size your position assuming elevated volatility and the possibility of further dilution.

3. Track the 90-day and 180-day checkpoints we outlined so you can adjust quickly if the story changes.

Sources

• 8-K (2026), filed January 9, 2026
• 10-K/A (2022), filed May 2, 2022
• DEF 14A (2025), filed April 15, 2025
• 10-K (2025), filed February 24, 2025
• 10-Q (2025), filed November 6, 2025
• Wall Street Journal, November 2025 – “SoFi raises full-year profit outlook as membership balloons”
• Nasdaq (Zacks), November 2025 – “SoFi’s upgraded outlook driven by strengthening scalable profitability”
• Economic Times, January 2026 – “Why SoFi shares are down after December drop”
• Investopedia, July 2025 – “SoFi offers exposure to OpenAI and SpaceX through new private market funds”
• Barron’s, August 2025 – “SoFi stock drops after offering amid dilution worries”
• Barron’s, August 2025 – “SoFi earnings: stock price reaction after blockbuster results”
• MarketWatch, December 2025 – “SoFi’s red-hot stock drops after plan to raise $1.5 billion in stock offering”
• The Bear Revolt, July 2025 – “Why SoFi stock dropped after crushing Q2 2025 earnings: the $1.5 billion dilution effect”
• Zacks, August 2025 – “SoFi shares fall despite impressive earnings: is the stock a buy?”
• TipRanks, November 2025 – “Why SoFi Technologies shares tumbled despite strong earnings”
• Davidsonian, January 2025 – “SoFi stock drop despite record earnings”