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Is SoFi Stock a Buy Now?

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  • After stellar first-quarter results, now could be a good time to buy this banking disruptor.

  • SoFi’s growth rate accelerated from an already impressive level.

  • The company is doing a great job of building its capital-light fee income.

SoFi (NASDAQ: SOFI) has taken investors on a bit of a roller coaster ride over the past year. After soaring rapidly in the latter half of 2024, the stock fell sharply after mildly disappointing profitability guidance in January.

However, SoFi just reported its first quarter results, and to say that the numbers look good would be an understatement. Here’s a rundown of how the company is doing, and whether it’s worth a closer look right now.

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SoFi not only set a new quarterly record for revenue, but with 33% year-over-year growth, the company’s already impressive growth rate is accelerating. This was fueled by adding more than 800,000 new members to the company’s ecosystem, also the highest ever, as well as record-high loan originations of $7.2 billion.

Speaking of lending originations, this was a surprisingly strong point, and not just when it comes to personal loans, which grew by 21% year-over-year in terms of volume. As student loan repayment resumed and forgiveness efforts effectively ended, SoFi’s student loan volume, including refinancing loans, increased by 58% year over year. And although home loans are a relatively small part of SoFi’s lending operations for now, that might not be the case for long, as home loan volume increased 54% despite the persistently high-interest environment.

Not only is SoFi’s revenue growing fast, but the company is also rapidly becoming more profitable. After posting its first full year of profitability in 2024, SoFi reported its highest quarterly earnings yet.

Product adoption is strong, with the number of products growing at a faster rate than the number of members for the first time since 2022. Cross-selling financial services and lending products to its existing members is one of SoFi’s biggest growth opportunities, and it appears to be doing a good job this year.

One of the biggest takeaways from SoFi’s first quarter results is just how strong its fee-based revenue growth has been. Essentially, this is anything that isn’t net interest income, and SoFi has done an excellent job of building this, especially through its third-party loan origination platform. Capital-light revenue sources like loan referral fees are a great way to scale and increase margin.

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